Calderon Legislation Aimed at Easing Tax Burdens on Businesses Approved by Assembly Revenue and Taxation Committee

Monday, March 27, 2017

SACRAMENTO, CA – Today, AB 1085, a measure authored by Assembly Majority Leader Ian Calderon which would allow limited liability companies (LLC) and certain corporations to pay the minimum franchise tax over a set amount of time based on a series of payment options, was approved by the Assembly Revenue and Taxation Committee.

“While California has adopted multiple programs to incentivize businesses to operate within the state, there’s still more we can do to boost the economy,” stated Majority Leader Calderon. “AB 1085 will make it easier for businesses to operate by providing flexible payment options in order to offset high tax burdens.”

Currently, the state imposes a minimum franchise tax of $800 on LLCs for the privilege of doing business within its borders. While all businesses are exempt from the tax within their first year of operation, the annual tax can be a burden on small businesses that struggle to stay afloat due to unforeseen cash-flow issues.

AB 1085 would allow LLCs that are in their first three years of operation and make less than $250,000 in annual revenue to pay the annual tax in a series of payment options over the course of a year. The bill also allows corporations whose estimated corporate tax does not exceed the minimum franchise tax to utilize these payment options during their first three taxable years. For qualified businesses, these options include on or before the 15th of April; in equal installments due on or before the 15th of April, the 15th of August, and the 15th of December; in two equal installments, with the first installment due on or before the 15th of April, and the second installment due within 12 months of that date.

AB 1085 is supported by the California Chamber of Commerce.

Contact: Lerna Shirinian (562) 692-5858

Majority Leader Ian C. Calderon was elected in November 2012 to represent California's 57th Assembly District, which includes the cities of Industry, La Habra Heights, La Mirada, La Puente, Norwalk, Santa Fe Springs, South El Monte, Whittier and the unincorporated communities of Avocado Heights, Bassett, East La Mirada, East Whittier, Los Nietos-West Whittier, South San Jose Hills, South Whittier, and Hacienda Heights.