BILL NUMBER: AB 799 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 26, 2015
INTRODUCED BY Assembly Member Travis Allen
FEBRUARY 26, 2015
An act to amend Section 17941 23102
of the Revenue and Taxation Code, relating to taxation
taxation, to take effect immediately, tax levy .
LEGISLATIVE COUNSEL'S DIGEST
AB 799, as amended, Travis Allen. Corporation taxes:
Income taxes: annual tax: limited liability
company.
Existing law, imposes a minimum franchise tax of $800, except as
provided, on every corporation incorporated in this state, qualified
to transact intrastate business in this state, or doing business
, as defined, in this state, and an annual tax in an amount
equal to the minimum franchise tax on every limited
partnership, limited liability partnership, and limited
liability company registered, qualified to transact business, or
doing business in this state, as specified. Existing law
provides that certain corporations, the activities of which are
limited to the receipt and disbursement of dividends and interest on
securities, are not considered as doing business in this
state.
This bill would make nonsubstantive changes to the provision
imposing an annual tax on limited liability companies.
This bill, under those same circumstances related to the receipt
and disbursement of dividends and interest on securities, would
additionally provide that such a limited liability company is not
considered as doing business in this state.
This bill would take effect immediately as a tax levy.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 23102 of the Revenue
and Taxation Code is amended to read:
23102. Any corporation or limited liability company
holding or organized to hold stock or bonds of any other corporation
or corporations, and not trading in stock or bonds or other
securities held, and engaging in no activities other than the receipt
and disbursement of dividends from stock or interest from bonds,
and no activities other than those exempted under subdivision
(c) of Section 191 of the Corporations Code, is not a
corporation or limited liability company doing business in
this State for the purposes of this chapter or Chapter 10.6
.
SEC. 2. This act provides for a tax levy within
the meaning of Article IV of the Constitution and shall go into
immediate effect.
SECTION 1. Section 17941 of the Revenue and
Taxation Code, as amended by Section 26 of Chapter 419 of the
Statutes of 2012, is amended to read:
17941. (a) For each taxable year beginning on or after January 1,
1997, a limited liability company doing business in this state, as
defined in Section 23101, shall pay annually to this state a tax for
the privilege of doing business in this state in an amount equal to
the applicable amount specified in subdivision (d) of Section 23153
for the taxable year.
(b) (1) In addition to any limited liability company that is doing
business in this state and is therefore subject to the tax imposed
by subdivision (a), for each taxable year beginning on or after
January 1, 1997, a limited liability company shall pay annually the
tax prescribed in subdivision (a) if articles of organization have
been accepted, or a certificate of registration has been issued, by
the office of the Secretary of State. The tax shall be paid for each
taxable year, or part thereof, until a certificate of cancellation of
registration or of articles of organization is filed on behalf of
the limited liability company with the office of the Secretary of
State.
(2) If a taxpayer files a return with the Franchise Tax Board that
is designated as its final return, the Franchise Tax Board shall
notify the taxpayer that the annual tax shall continue to be due
annually until a certificate of dissolution is filed with the
Secretary of State pursuant to Section 17707.08 of the Corporations
Code or a certificate of cancellation is filed with the Secretary of
State pursuant to Section 17708.06 of the Corporations Code.
(c) The tax assessed under this section shall be due and payable
on or before the 15th day of the fourth month of the taxable year.
(d) For purposes of this section, "limited liability company"
means an organization, other than a limited liability company that is
exempt from the tax and fees imposed under this chapter pursuant to
Section 23701h or Section 23701x, that is formed by one or more
persons under the law of this state, any other country, or any other
state, as a "limited liability company" and that is not taxable as a
corporation for California tax purposes.
(e) Notwithstanding anything in this section to the contrary, if
the office of the Secretary of State files a certificate of
cancellation pursuant to Section 17707.02 of the Corporations Code
for any limited liability company, then paragraph (1) of subdivision
(f) of Section 23153 shall apply to that limited liability company as
if the limited liability company were properly treated as a
corporation for that limited purpose only, and paragraph (2) of
subdivision (f) of Section 23153 shall not apply. Nothing in this
subdivision entitles a limited liability company to receive a
reimbursement for any annual taxes or fees already paid.
(f) (1) Notwithstanding any provision of this section to the
contrary, a limited liability company that is a small business solely
owned by a deployed member of the United States Armed Forces shall
not be subject to the tax imposed under this section for any taxable
year the owner is deployed and the limited liability company operates
at a loss or ceases operation.
(2) The Franchise Tax Board may promulgate regulations as
necessary or appropriate to carry out the purposes of this
subdivision, including a definition for "ceases operation."
(3) For the purposes of this subdivision, all of the following
definitions apply:
(A) "Deployed" means being called to active duty or active service
during a period when a Presidential Executive order specifies that
the United States is engaged in combat or homeland defense. "Deployed"
does not include either of the following:
(i) Temporary duty for the sole purpose of training or processing.
(ii) A permanent change of station.
(B) "Operates at a loss" means a limited liability company's
expenses exceed its receipts.
(C) "Small business" means a limited liability company with total
income from all sources derived from, or attributable, to the state
of two hundred fifty thousand dollars ($250,000) or less.
(4) This subdivision shall become inoperative for taxable years
beginning on or after January 1, 2018.