On February 12, Assembly Member Frank Bigelow introduced Assembly Bill 664 to suspend annual tax payments for small businesses. The bill would amend Sections 17935, 17941, 17948, and 19001, and add Section 19001.5 to the Revenue and Taxation Code. This measure contains an urgency clause and would take effect immediately upon enactment if passed by 2/3 of both houses of the Legislature.
Existing California law imposes taxes on corporations including an annual tax for doing business in this state. Section One of the bill would amend Revenue and Taxation Code Section 17935 by adding subdivision (g) as follows: “Notwithstanding Section 19001, for taxable years beginning on or after January 1, 2020, for every limited partnership that is a small business, as that term is defined by Section 14837 of the Government Code, payment of the tax imposed by this section shall not be due, and penalties or interest related to the payment of the tax for those taxable years shall not accrue, until the state of emergency declared by the Governor on March 4, 2020, related to the COVID-19 virus, has ended.”
Section Two of the bill would amend Revenue and Taxation Code Section 17941 with the same language, applicable to a limited liability company; Section Three of the bill would amend Section 17948 with this same language, applicable to a limited liability partnership. Section Four of the bill would make a technical amendment to Section 19001.
Section Five of the bill would add the same language to new Section 19001.5, applicable to a small business. The definition of “small business” is the same as found in Government Code Section 14837(d)(1)(A), which is an independently owned and operated business that is not dominant in its field of operation, the principal office of which is located in California, the officers of which are domiciled in California, and which, together with affiliates, has 100 or fewer employees, and average annual gross receipts of $15 million or less over the previous three years, or is a manufacturer with 100 or fewer employees.
AB 664 is expected to be heard in its first policy committee in March.
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