Corporation taxes: annual and minimum franchise tax: single-member limited liability company or single-owner corporation: tax reduction.

Existing income tax laws impose a minimum franchise tax on every corporation incorporated in this state, qualified to transact intrastate business in this state, or doing business 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. This bill, for taxable years beginning on or after January 1, 2021, would provide that a single-owner corporation, as defined, or a single-member limited liability company, as defined, is not subject to the minimum franchise tax or annual tax in the company's first taxable year. The bill would subject those entities to an annual increase in those taxes by $200 commencing in the second taxable year, and every taxable year thereafter, until the entity is subject to 100% of those taxes. The bill would require the Franchise Tax Board to administer the tax reduction on a first-come-first-served basis, as provided, and limit the total reduction provided for each tax to $100,000,000 per taxable year. Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements. The bill also would include additional information required for any bill authorizing a new tax expenditure. This bill would take effect immediately as a tax levy.