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 paragraph (1) of 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.
(g) (1) Notwithstanding subdivision (a), subdivisions (a) and (b), for taxable
years beginning on or after January 1, 2020, and before January 1, 2025, a limited liability company that is a new limited liability company and is a small business in its first taxable year shall not be subject to the minimum annual tax for its first taxable year.
(2) For purposes of this subdivision:
(A) “Gross receipts, less returns and allowances reportable to this state,” means the sum of the gross receipts from the production of business income, as defined in subdivision (a) of Section 25120, and the gross receipts from the production of nonbusiness
income, as defined in subdivision (d) of Section 25120.
(B) “New limited liability company” means a limited liability company that is formed on or after January 1, 2020. “New limited liability company” does not include any limited liability company that began business operations as, or acquired its business operations from, a sole proprietorship, a limited liability partnership, or any other form of business entity prior to beginning business operations or any limited liability company that acquired its business operations from a limited liability company.
(C) “Small business” means a limited liability company that has gross receipts, less returns and allowances, reportable to this state for the taxable year of fifty thousand dollars
($50,000) or less.
(3) (A) This subdivision shall not apply to any limited liability company that reorganizes solely for the purpose of reducing its minimum annual tax.
(B) This subdivision shall not apply to a limited liability company that does not file a timely return.
(4) It is the intent of the Legislature to apply the requirements of Section 41 of the Revenue and Taxation Code to
this act, as follows:
(A) The goal and objective of this subdivision is to lower the tax burden placed on new companies in their first, crucial year of operation while promoting economic vitality and job creation in the State of California. By providing a tax exemption during the first operative year, the act will offset other financial burdens a business faces during their start-up year.
(B) The Legislature will collect data to determine if the annual tax exemption provided by this subdivision is meeting, failing to meet, or exceeding the specific goals provided in subparagraph (A).
(5) This subdivision shall become inoperative for taxable years beginning on or after January 1, 2025.