Corporation taxes: minimum franchise tax: annual tax: dormant and inactive business entities.

The Corporation Tax Law imposes taxes on, or measured by, income, as specified. The Corporation Tax 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 in this state. Existing law imposes an annual tax in an amount equal to the minimum franchise tax on every limited partnership, limited liability company, and limited liability partnership doing business in this state. In addition, existing law requires every limited partnership that has filed a certificate with the Secretary of State and every foreign limited partnership that has registered with the Secretary of State, every limited liability company if the articles of organization have been accepted by, or a certificate of registration has been issued by, the Secretary of State, and every registered limited liability partnership and every foreign limited liability partnership that has registered with the Secretary of State, to pay an annual tax in an amount equal to the minimum franchise tax. This bill would reduce the minimum franchise tax to $200 for a dormant business entity and to $50 for an inactive business entity, as specified. This bill would define "dormant business entity" as a business entity that is organized under state law or has qualified to transact intrastate business in this state and that certifies under penalty of perjury with its return for the taxable year that it was not doing business in this state. This bill defines "inactive business entity" as a business entity, other than a limited partnership or a limited liability partnership, that is organized under state law or has qualified to transact intrastate business and that reasonably believes that it will not be doing business in this state for that taxable year. By expanding the crime of perjury, this bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. This bill would take effect immediately as a tax levy.