Minimum franchise tax: small business fees.

(1) Existing law, the Corporation Tax Law, imposes an annual 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, and an annual tax in an amount equal to the minimum franchise tax on every limited partnership, limited liability partnership, and limited liability company doing business in this state, as specified. Existing law requires a bill that would authorize a new tax expenditure under the Corporation Tax Law to identify specific goals, purposes, and objectives that the tax expenditure will achieve and detailed performance indicators and data collection requirements for determining whether the tax expenditure achieves these goals, purposes, and objectives. This bill, for taxable years beginning on or after January 1, 2022, and before January 1, 2027, would reduce the minimum franchise tax, as provided, based on the gross receipts during the taxable year of the corporation but would continue to impose the current amount of the annual tax on corporations described above whose gross receipts exceed $15,000,000 and on every limited partnership, limited liability partnership, and limited liability company doing business in this state. This bill would make findings specifying the goal, purpose, and objective of the tax expenditure provided by this bill and the performance indicator to be used and would require, on or before January 1, 2023, the Franchise Tax Board to submit an annual report to the Legislature on the effect of tax reduction on corporations that are small businesses in the state, as specified. (2) Existing law authorizes cities and counties to license any kind of business, not prohibited by law, transacted and carried on within the limits of its jurisdiction. Cities and counties, pursuant to certain restrictions, may impose a license fee on those businesses. Existing law also authorizes the state to impose various licensing fees on businesses, including alcoholic beverage licenses and cannabis licenses. This bill would state the intent of the Legislature to enact legislation that would provide small businesses economic relief from the effects of COVID-19 by waiving fees. (3) This bill would take effect immediately as a tax levy.