California 2013-2014 Regular Session Status: In Committee 1 R cosponsors

AB 2428 — Income taxes: minimum franchise tax: annual tax: deductions: exemptions.

Last action — From committee without further action.

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  1. ✓
    Introduced
  2. 2
    In Committee
  3. 3
    Passed Assembly
  4. 4
    Passed Senate
  5. 5
    To Executive
  6. 6
    Enacted

This bill died with 2013-2014 Regular Session. It reached “In Committee” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.

This bill is no longer active — its legislative session has ended, so there is no live prognosis. It would have to be reintroduced in the current session to move again.

Summary

The Personal Income Tax Law allows various deductions in computing the income that is subject to the tax imposed by that law. This bill would allow, for taxable years beginning on or after January 1, 2015, as a deduction any income earned or received by a taxpayer that is attributable to a taxpayer's status as a partner in or sole proprietor of a qualified business, as defined, for the first 5 consecutive taxable years in which the business is a qualified business. Existing law generally 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, 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 requires every limited liability company subject to the annual tax to pay annually to this state a fee equal to specified amounts based upon total income from all sources reportable to this state. This bill would exempt from the minimum franchise tax every corporation incorporated in this state on or after January 1, 2015, for the first 5 consecutive taxable years during which the corporation does business within this state. This bill would also exempt from the annual tax every limited partnership, limited liability partnership, and limited liability company that files a specified form with the Secretary of State on or after January 1, 2015, as specified, for the first 5 consecutive taxable years during the time that entity does business within the state. This bill would additionally exempt a limited liability company that files a specified form with the Secretary of State on or after January 1, 2015, from the fee equal to specified amounts for the first 5 consecutive taxable years that the limited liability company does business within this state. The Corporation Tax Law, in modified conformity with federal income tax laws, exempts various types of organizations from state income taxes imposed by that law. This bill would exempt a corporation that incorporates under the laws of this state on or after January 1, 2015, for the first 5 consecutive taxable years that it does business within this state. Under existing law, a corporation that is a small business solely owned by a deployed member of the United States Armed Forces is not subject to the minimum franchise tax when the owner is deployed and the corporation meets certain requirements. Existing law makes these provisions inoperative for taxable years beginning on or after January 1, 2018. This bill would instead make these provisions inoperative for taxable years beginning on or after January 1, 2019. This bill would take effect immediately as a tax levy.

Bill Text

Action History

  1. From committee without further action.

  2. In committee: Set, second hearing. Held under submission.

  3. In committee: Set, first hearing. Referred to REV. & TAX. suspense file.

  4. Re-referred to Com. on REV. & TAX.

  5. From committee chair, with author's amendments: Amend, and re-refer to Com. on REV. & TAX. Read second time and amended.

  6. Referred to Com. on REV. & TAX.

  7. Read first time.

  8. From printer. May be heard in committee March 25.

  9. Introduced. To print.

Sponsors

  • Chávez · Cosponsor
  • Donnelly · Cosponsor
  • Olsen · Cosponsor
  • Joe Patterson · Primary

Sponsorship breakdown

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1 sponsors · 3 co-sponsors · 118 not signed on

Sponsors (1)

Co-sponsors (3)

  • Chávez
  • Donnelly
  • Olsen

Not signed on (118)

118 members have not signed on to this bill.

Show all 118 →

"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

Whip count is in markup. Polling the chamber and every recorded vote this session. Only the first open is slow. It’s instant for you after this. Calling the roll · Tallying · Engrossing

Subjects

taxation
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Frequently asked questions

What does AB 2428 do?
The Personal Income Tax Law allows various deductions in computing the income that is subject to the tax imposed by that law. This bill would allow, for taxable years beginning on or after January 1, 2015, as a deduction any income earned or received by a taxpayer that is attributable to a taxpayer's status as a partner in or sole proprietor of a qualified business, as defined, for the first 5 consecutive taxable years in which the business is a qualified business. Existing law generally 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, 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 requires every limited liability company subject to the annual tax to pay annually to this state a fee equal to specified amounts based upon total income from all sources reportable to this state. This bill would exempt from the minimum franchise tax every corporation incorporated in this state on or after January 1, 2015, for the first 5 consecutive taxable years during which the corporation does business within this state. This bill would also exempt from the annual tax every limited partnership, limited liability partnership, and limited liability company that files a specified form with the Secretary of State on or after January 1, 2015, as specified, for the first 5 consecutive taxable years during the time that entity does business within the state. This bill would additionally exempt a limited liability company that files a specified form with the Secretary of State on or after January 1, 2015, from the fee equal to specified amounts for the first 5 consecutive taxable years that the limited liability company does business within this state. The Corporation Tax Law, in modified conformity with federal income tax laws, exempts various types of organizations from state income taxes imposed by that law. This bill would exempt a corporation that incorporates under the laws of this state on or after January 1, 2015, for the first 5 consecutive taxable years that it does business within this state. Under existing law, a corporation that is a small business solely owned by a deployed member of the United States Armed Forces is not subject to the minimum franchise tax when the owner is deployed and the corporation meets certain requirements. Existing law makes these provisions inoperative for taxable years beginning on or after January 1, 2018. This bill would instead make these provisions inoperative for taxable years beginning on or after January 1, 2019. This bill would take effect immediately as a tax levy.
Who sponsors AB 2428?
AB 2428 is sponsored by Chávez, Donnelly, Olsen, and Patterson, Joe (Republican).
What is the current status of AB 2428?
This bill died with 2013-2014 Regular Session. It reached “In Committee” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.
Where can I track AB 2428?
Track AB 2428 free on One Click Politics — get push/email alerts when it moves.

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