23151. (a) With the exception of banks and financial corporations,
every corporation doing business within the limits of this state and
not expressly exempted from taxation by the provisions of the
Constitution of this state or by this part, shall annually pay to the
state, for the privilege of exercising its corporate franchises
within this state, a tax according to or measured by its net income,
to be computed at the rate of 7.6 percent upon the basis of its net
income for the next preceding income year, or if greater, the minimum
tax specified in Section 23153.
(b) For calendar or fiscal years ending after June 30, 1973, the
rate of tax shall be 9 percent instead of 7.6 percent as provided by
subdivision (a).
(c) For calendar or fiscal years ending in 1980 to 1986,
inclusive, the rate of tax shall be 9.6 percent.
(d) For calendar or fiscal years ending in 1987 to 1996,
inclusive, and for any income year beginning before January 1, 1997,
the tax rate shall be 9.3 percent.
(e) For any income year beginning on or after January 1, 1997, the
tax rate shall be 8.84 percent. The change in rate provided in this
subdivision shall be made without proration otherwise required by
Section 24251.
(f) (1) For the first taxable year beginning on or after January
1, 2000, the tax imposed under this section shall be the sum of both
of the following:
(A) A tax according to or measured by net income, to be computed
at the rate of 8.84 percent upon the basis of the net income for the
next preceding income year, but not less than the minimum tax
specified in Section 23153.
(B) A tax according to or measured by net income, to be computed
at the rate of 8.84 percent upon the basis of the net income for the
first taxable year beginning on or after January 1, 2000, but not
less than the minimum tax specified in Section 23153.
(2) Except as provided in paragraph (1), for taxable years
beginning on or after January 1, 2000, the tax imposed under this
section shall be a tax according to or measured by net income, to be
computed at the rate of 8.84 percent upon the basis of the net income
for that taxable year, but not less than the minimum tax specified
in Section 23153.
23151.1. Notwithstanding Section 23151, every corporation (except
banks and financial corporations) doing business within the limits of
this state and not exempted from taxation by the provisions of the
Constitution of this state or by this part, shall annually pay to the
state for the privilege of exercising its corporate franchises
within this state, a tax determined as follows:
(a) With respect to corporations, other than those described in
subdivision (b), which commence doing business within the state after
December 31, 1971, and before January 1, 2000, the tax for the
taxable year of commencement, whether or not for 12 full months,
shall be the minimum franchise tax prescribed in Section 23153.
(b) If after December 31, 1972, a corporation commences to do
business and ceases doing business in the same taxable year, the tax
for that taxable year shall be according to or measured by its net
income for the year, to be computed at the rate prescribed in Section
23151.
(c) (1) With respect to taxable years beginning after December 31,
1972, and before January 1, 2000, other than the year of
commencement described in subdivision (a) or (b) or the year of
cessation described in subdivision (d), the tax for that taxable year
shall be according to or measured by its net income for the next
preceding taxable year, to be computed at the rate prescribed in
Section 23151.
(2) With respect to taxable years beginning on or after January 1,
2000, (other than the first taxable year beginning on or after that
date), the tax for the taxable year (including the taxable year of
commencement and the taxable year of cessation) shall be according to
or measured by its net income for the taxable year to be computed at
the rate prescribed in Section 23151.
(d) With respect to corporations which cease doing business in a
taxable year beginning after December 31, 1972, and before January 1,
2000, other than those described in subdivision (b), the tax for the
taxable year of cessation shall be:
(1) According to or measured by its net income for the next
preceding taxable year, to be computed at the rate prescribed in
Section 23151, plus
(2) According to or measured by its net income for the taxable
year during which the corporation ceased doing business, to be
computed at the rate prescribed in Section 23151.
(e) In any event, the tax for any taxable year shall not be less
than the minimum tax provided for in Section 23153 for that taxable
year.
23151.2. Notwithstanding Section 23151, every corporation (except
banks and financial corporations) not exempted from taxation by the
provisions of the Constitution of this state or by this part which
dissolves or withdraws, shall pay a tax for its taxable year of
dissolution or withdrawal according to or measured by its net income
for the taxable year in which it ceased doing business, unless that
income has previously been included in the measure of tax for any
taxable year, to be computed at the rate prescribed in Section 23151
for its taxable year of dissolution or withdrawal. In any event, the
tax for the taxable year of its dissolution or withdrawal shall not
be less than the minimum tax provided for in Section 23153 for that
taxable year.
23153. (a) Every corporation described in subdivision (b) shall be
subject to the minimum franchise tax specified in subdivision (d)
from the earlier of the date of incorporation, qualification, or
commencing to do business within this state, until the effective date
of dissolution or withdrawal as provided in Section 23331 or, if
later, the date the corporation ceases to do business within the
limits of this state.
(b) Unless expressly exempted by this part or the California
Constitution, subdivision (a) shall apply to each of the following:
(1) Every corporation that is incorporated under the laws of this
state.
(2) Every corporation that is qualified to transact intrastate
business in this state pursuant to Chapter 21 (commencing with
Section 2100) of Division 1 of Title 1 of the Corporations Code.
(3) Every corporation that is doing business in this state.
(c) The following entities are not subject to the minimum
franchise tax specified in this section:
(1) Credit unions.
(2) Nonprofit cooperative associations organized pursuant to
Chapter 1 (commencing with Section 54001) of Division 20 of the Food
and Agricultural Code that have been issued the certificate of the
board of supervisors prepared pursuant to Section 54042 of the Food
and Agricultural Code. The association shall be exempt from the
minimum franchise tax for five consecutive taxable years, commencing
with the first taxable year for which the certificate is issued
pursuant to subdivision (b) of Section 54042 of the Food and
Agricultural Code. This paragraph only applies to nonprofit
cooperative associations organized on or after January 1, 1994.
(d) (1) Except as provided in paragraph (2), paragraph (1) of
subdivision (f) of Section 23151, paragraph (1) of subdivision (f) of
Section 23181, and paragraph (1) of subdivision (c) of Section
23183, corporations subject to the minimum franchise tax shall pay
annually to the state a minimum franchise tax of eight hundred
dollars ($800).
(2) The minimum franchise tax shall be twenty-five dollars ($25)
for each of the following:
(A) A corporation formed under the laws of this state whose
principal business when formed was gold mining, which is inactive and
has not done business within the limits of the state since 1950.
(B) A corporation formed under the laws of this state whose
principal business when formed was quicksilver mining, which is
inactive and has not done business within the limits of the state
since 1971, or has been inactive for a period of 24 consecutive
months or more.
(3) For purposes of paragraph (2), a corporation shall not be
considered to have done business if it engages in other than mining.
(e) Notwithstanding subdivision (a), for taxable years beginning
on or after January 1, 1999, and before January 1, 2000, every
"qualified new corporation" shall pay annually to the state a minimum
franchise tax of five hundred dollars ($500) for the second taxable
year. This subdivision shall apply to any corporation that is a
qualified new corporation and is incorporated on or after January 1,
1999, and before January 1, 2000.
(1) The determination of the gross receipts of a corporation, for
purposes of this subdivision, shall be made by including the gross
receipts of each member of the commonly controlled group, as defined
in Section 25105, of which the corporation is a member.
(2) "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.
(3) "Qualified new corporation" means a corporation that is
incorporated under the laws of this state or has qualified to
transact intrastate business in this state, that begins business
operations at or after the time of its incorporation and that
reasonably estimates that it will have gross receipts, less returns
and allowances, reportable to this state for the taxable year of one
million dollars ($1,000,000) or less. "Qualified new corporation"
does not include any corporation that began business operations as a
sole proprietorship, a partnership, or any other form of business
entity prior to its incorporation. This subdivision shall not apply
to any corporation that reorganizes solely for the purpose of
reducing its minimum franchise tax.
(4) This subdivision shall not apply to limited partnerships, as
defined in Section 17935, limited liability companies, as defined in
Section 17941, limited liability partnerships, as defined in Section
17948, charitable organizations, as described in Section 23703,
regulated investment companies, as defined in Section 851 of the
Internal Revenue Code, real estate investment trusts, as defined in
Section 856 of the Internal Revenue Code, real estate mortgage
investment conduits, as defined in Section 860D of the Internal
Revenue Code, qualified Subchapter S subsidiaries, as defined in
Section 1361(b)(3) of the Internal Revenue Code, or to the formation
of any subsidiary corporation, to the extent applicable.
(5) For any taxable year beginning on or after January 1, 1999,
and before January 1, 2000, if a corporation has qualified to pay
five hundred dollars ($500) for the second taxable year under this
subdivision, but in its second taxable year, the corporation's gross
receipts, as determined under paragraphs (1) and (2), exceed one
million dollars ($1,000,000), an additional tax in the amount equal
to three hundred dollars ($300) for the second taxable year shall be
due and payable by the corporation on the due date of its return,
without regard to extension, for that year.
(f) (1) Notwithstanding subdivision (a), every corporation that
incorporates or qualifies to do business in this state on or after
January 1, 2000, shall not be subject to the minimum franchise tax
for its first taxable year.
(2) This subdivision shall not apply to limited partnerships, as
defined in Section 17935, limited liability companies, as defined in
Section 17941, limited liability partnerships, as defined in Section
17948, charitable organizations, as described in Section 23703,
regulated investment companies, as defined in Section 851 of the
Internal Revenue Code, real estate investment trusts, as defined in
Section 856 of the Internal Revenue Code, real estate mortgage
investment conduits, as defined in Section 860D of the Internal
Revenue Code, and qualified Subchapter S subsidiaries, as defined in
Section 1361(b)(3) of the Internal Revenue Code, to the extent
applicable.
(3) This subdivision shall not apply to any corporation that
reorganizes solely for the purpose of avoiding payment of its minimum
franchise tax.
(g) Notwithstanding subdivision (a), a domestic corporation, as
defined in Section 167 of the Corporations Code, that files a
certificate of dissolution in the office of the Secretary of State
pursuant to subdivision (b) of Section 1905 of the Corporations Code,
prior to its amendment by the act amending this subdivision, and
that does not thereafter do business shall not be subject to the
minimum franchise tax for taxable years beginning on or after the
date of that filing.
(h) The minimum franchise tax imposed by paragraph (1) of
subdivision (d) shall not be increased by the Legislature by more
than 10 percent during any calendar year.
(i) (1) Notwithstanding subdivision (a), a corporation that is a
small business solely owned by a deployed member of the United States
Armed Forces shall not be subject to the minimum franchise tax for
any taxable year the owner is deployed and the corporation 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 negative net income as defined in
Section 24341.
(C) "Small business" means a corporation 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.
23154. The tax imposed under this chapter is in lieu of all ad
valorem taxes and assessments of every kind and nature upon the
general corporate franchises of the corporations taxable under this
chapter but is not in lieu of any taxes or assessments upon real
property interests not otherwise exempted from taxation or
assessment, that are created by special franchises owned, held, or
used by those corporations. All those real property interests, not
otherwise exempted from taxation or assessment that are created by
those special franchises shall be assessed annually by the board, at
their actual value, in the same manner as is provided for the
assessment of other property to be assessed by that board under
Section 19 of Article XIII of the California Constitution, and shall
be subject to taxation to the same extent and in the same manner as
other property assessed under that constitutional provision by the
board. For purposes of assessing a real property interest pursuant to
the preceding sentence, the value of intangible assets or rights
shall not enhance or be reflected in the value of that real property
interest, except that the real property interest may be assessed and
valued by assuming the presence of intangible assets and rights
necessary to put the real property interest to beneficial or
productive use.
23155. In the event that taxes, interest and penalties have been or
shall be assessed against, paid by or collected from a taxpayer
under a subdivision of Section 23151.1, which assessment, payment or
collection should have been made under a different subdivision, such
taxes, interest and penalties shall be considered as having been
assessed, paid or collected under such different subdivision as of
the date or dates they were made.
23151. (a) With the exception of banks and financial corporations,
every corporation doing business within the limits of this state and
not expressly exempted from taxation by the provisions of the
Constitution of this state or by this part, shall annually pay to the
state, for the privilege of exercising its corporate franchises
within this state, a tax according to or measured by its net income,
to be computed at the rate of 7.6 percent upon the basis of its net
income for the next preceding income year, or if greater, the minimum
tax specified in Section 23153.
(b) For calendar or fiscal years ending after June 30, 1973, the
rate of tax shall be 9 percent instead of 7.6 percent as provided by
subdivision (a).
(c) For calendar or fiscal years ending in 1980 to 1986,
inclusive, the rate of tax shall be 9.6 percent.
(d) For calendar or fiscal years ending in 1987 to 1996,
inclusive, and for any income year beginning before January 1, 1997,
the tax rate shall be 9.3 percent.
(e) For any income year beginning on or after January 1, 1997, the
tax rate shall be 8.84 percent. The change in rate provided in this
subdivision shall be made without proration otherwise required by
Section 24251.
(f) (1) For the first taxable year beginning on or after January
1, 2000, the tax imposed under this section shall be the sum of both
of the following:
(A) A tax according to or measured by net income, to be computed
at the rate of 8.84 percent upon the basis of the net income for the
next preceding income year, but not less than the minimum tax
specified in Section 23153.
(B) A tax according to or measured by net income, to be computed
at the rate of 8.84 percent upon the basis of the net income for the
first taxable year beginning on or after January 1, 2000, but not
less than the minimum tax specified in Section 23153.
(2) Except as provided in paragraph (1), for taxable years
beginning on or after January 1, 2000, the tax imposed under this
section shall be a tax according to or measured by net income, to be
computed at the rate of 8.84 percent upon the basis of the net income
for that taxable year, but not less than the minimum tax specified
in Section 23153.
23151.1. Notwithstanding Section 23151, every corporation (except
banks and financial corporations) doing business within the limits of
this state and not exempted from taxation by the provisions of the
Constitution of this state or by this part, shall annually pay to the
state for the privilege of exercising its corporate franchises
within this state, a tax determined as follows:
(a) With respect to corporations, other than those described in
subdivision (b), which commence doing business within the state after
December 31, 1971, and before January 1, 2000, the tax for the
taxable year of commencement, whether or not for 12 full months,
shall be the minimum franchise tax prescribed in Section 23153.
(b) If after December 31, 1972, a corporation commences to do
business and ceases doing business in the same taxable year, the tax
for that taxable year shall be according to or measured by its net
income for the year, to be computed at the rate prescribed in Section
23151.
(c) (1) With respect to taxable years beginning after December 31,
1972, and before January 1, 2000, other than the year of
commencement described in subdivision (a) or (b) or the year of
cessation described in subdivision (d), the tax for that taxable year
shall be according to or measured by its net income for the next
preceding taxable year, to be computed at the rate prescribed in
Section 23151.
(2) With respect to taxable years beginning on or after January 1,
2000, (other than the first taxable year beginning on or after that
date), the tax for the taxable year (including the taxable year of
commencement and the taxable year of cessation) shall be according to
or measured by its net income for the taxable year to be computed at
the rate prescribed in Section 23151.
(d) With respect to corporations which cease doing business in a
taxable year beginning after December 31, 1972, and before January 1,
2000, other than those described in subdivision (b), the tax for the
taxable year of cessation shall be:
(1) According to or measured by its net income for the next
preceding taxable year, to be computed at the rate prescribed in
Section 23151, plus
(2) According to or measured by its net income for the taxable
year during which the corporation ceased doing business, to be
computed at the rate prescribed in Section 23151.
(e) In any event, the tax for any taxable year shall not be less
than the minimum tax provided for in Section 23153 for that taxable
year.
23151.2. Notwithstanding Section 23151, every corporation (except
banks and financial corporations) not exempted from taxation by the
provisions of the Constitution of this state or by this part which
dissolves or withdraws, shall pay a tax for its taxable year of
dissolution or withdrawal according to or measured by its net income
for the taxable year in which it ceased doing business, unless that
income has previously been included in the measure of tax for any
taxable year, to be computed at the rate prescribed in Section 23151
for its taxable year of dissolution or withdrawal. In any event, the
tax for the taxable year of its dissolution or withdrawal shall not
be less than the minimum tax provided for in Section 23153 for that
taxable year.
23153. (a) Every corporation described in subdivision (b) shall be
subject to the minimum franchise tax specified in subdivision (d)
from the earlier of the date of incorporation, qualification, or
commencing to do business within this state, until the effective date
of dissolution or withdrawal as provided in Section 23331 or, if
later, the date the corporation ceases to do business within the
limits of this state.
(b) Unless expressly exempted by this part or the California
Constitution, subdivision (a) shall apply to each of the following:
(1) Every corporation that is incorporated under the laws of this
state.
(2) Every corporation that is qualified to transact intrastate
business in this state pursuant to Chapter 21 (commencing with
Section 2100) of Division 1 of Title 1 of the Corporations Code.
(3) Every corporation that is doing business in this state.
(c) The following entities are not subject to the minimum
franchise tax specified in this section:
(1) Credit unions.
(2) Nonprofit cooperative associations organized pursuant to
Chapter 1 (commencing with Section 54001) of Division 20 of the Food
and Agricultural Code that have been issued the certificate of the
board of supervisors prepared pursuant to Section 54042 of the Food
and Agricultural Code. The association shall be exempt from the
minimum franchise tax for five consecutive taxable years, commencing
with the first taxable year for which the certificate is issued
pursuant to subdivision (b) of Section 54042 of the Food and
Agricultural Code. This paragraph only applies to nonprofit
cooperative associations organized on or after January 1, 1994.
(d) (1) Except as provided in paragraph (2), paragraph (1) of
subdivision (f) of Section 23151, paragraph (1) of subdivision (f) of
Section 23181, and paragraph (1) of subdivision (c) of Section
23183, corporations subject to the minimum franchise tax shall pay
annually to the state a minimum franchise tax of eight hundred
dollars ($800).
(2) The minimum franchise tax shall be twenty-five dollars ($25)
for each of the following:
(A) A corporation formed under the laws of this state whose
principal business when formed was gold mining, which is inactive and
has not done business within the limits of the state since 1950.
(B) A corporation formed under the laws of this state whose
principal business when formed was quicksilver mining, which is
inactive and has not done business within the limits of the state
since 1971, or has been inactive for a period of 24 consecutive
months or more.
(3) For purposes of paragraph (2), a corporation shall not be
considered to have done business if it engages in other than mining.
(e) Notwithstanding subdivision (a), for taxable years beginning
on or after January 1, 1999, and before January 1, 2000, every
"qualified new corporation" shall pay annually to the state a minimum
franchise tax of five hundred dollars ($500) for the second taxable
year. This subdivision shall apply to any corporation that is a
qualified new corporation and is incorporated on or after January 1,
1999, and before January 1, 2000.
(1) The determination of the gross receipts of a corporation, for
purposes of this subdivision, shall be made by including the gross
receipts of each member of the commonly controlled group, as defined
in Section 25105, of which the corporation is a member.
(2) "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.
(3) "Qualified new corporation" means a corporation that is
incorporated under the laws of this state or has qualified to
transact intrastate business in this state, that begins business
operations at or after the time of its incorporation and that
reasonably estimates that it will have gross receipts, less returns
and allowances, reportable to this state for the taxable year of one
million dollars ($1,000,000) or less. "Qualified new corporation"
does not include any corporation that began business operations as a
sole proprietorship, a partnership, or any other form of business
entity prior to its incorporation. This subdivision shall not apply
to any corporation that reorganizes solely for the purpose of
reducing its minimum franchise tax.
(4) This subdivision shall not apply to limited partnerships, as
defined in Section 17935, limited liability companies, as defined in
Section 17941, limited liability partnerships, as defined in Section
17948, charitable organizations, as described in Section 23703,
regulated investment companies, as defined in Section 851 of the
Internal Revenue Code, real estate investment trusts, as defined in
Section 856 of the Internal Revenue Code, real estate mortgage
investment conduits, as defined in Section 860D of the Internal
Revenue Code, qualified Subchapter S subsidiaries, as defined in
Section 1361(b)(3) of the Internal Revenue Code, or to the formation
of any subsidiary corporation, to the extent applicable.
(5) For any taxable year beginning on or after January 1, 1999,
and before January 1, 2000, if a corporation has qualified to pay
five hundred dollars ($500) for the second taxable year under this
subdivision, but in its second taxable year, the corporation's gross
receipts, as determined under paragraphs (1) and (2), exceed one
million dollars ($1,000,000), an additional tax in the amount equal
to three hundred dollars ($300) for the second taxable year shall be
due and payable by the corporation on the due date of its return,
without regard to extension, for that year.
(f) (1) Notwithstanding subdivision (a), every corporation that
incorporates or qualifies to do business in this state on or after
January 1, 2000, shall not be subject to the minimum franchise tax
for its first taxable year.
(2) This subdivision shall not apply to limited partnerships, as
defined in Section 17935, limited liability companies, as defined in
Section 17941, limited liability partnerships, as defined in Section
17948, charitable organizations, as described in Section 23703,
regulated investment companies, as defined in Section 851 of the
Internal Revenue Code, real estate investment trusts, as defined in
Section 856 of the Internal Revenue Code, real estate mortgage
investment conduits, as defined in Section 860D of the Internal
Revenue Code, and qualified Subchapter S subsidiaries, as defined in
Section 1361(b)(3) of the Internal Revenue Code, to the extent
applicable.
(3) This subdivision shall not apply to any corporation that
reorganizes solely for the purpose of avoiding payment of its minimum
franchise tax.
(g) Notwithstanding subdivision (a), a domestic corporation, as
defined in Section 167 of the Corporations Code, that files a
certificate of dissolution in the office of the Secretary of State
pursuant to subdivision (b) of Section 1905 of the Corporations Code,
prior to its amendment by the act amending this subdivision, and
that does not thereafter do business shall not be subject to the
minimum franchise tax for taxable years beginning on or after the
date of that filing.
(h) The minimum franchise tax imposed by paragraph (1) of
subdivision (d) shall not be increased by the Legislature by more
than 10 percent during any calendar year.
(i) (1) Notwithstanding subdivision (a), a corporation that is a
small business solely owned by a deployed member of the United States
Armed Forces shall not be subject to the minimum franchise tax for
any taxable year the owner is deployed and the corporation 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 negative net income as defined in
Section 24341.
(C) "Small business" means a corporation 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.
23154. The tax imposed under this chapter is in lieu of all ad
valorem taxes and assessments of every kind and nature upon the
general corporate franchises of the corporations taxable under this
chapter but is not in lieu of any taxes or assessments upon real
property interests not otherwise exempted from taxation or
assessment, that are created by special franchises owned, held, or
used by those corporations. All those real property interests, not
otherwise exempted from taxation or assessment that are created by
those special franchises shall be assessed annually by the board, at
their actual value, in the same manner as is provided for the
assessment of other property to be assessed by that board under
Section 19 of Article XIII of the California Constitution, and shall
be subject to taxation to the same extent and in the same manner as
other property assessed under that constitutional provision by the
board. For purposes of assessing a real property interest pursuant to
the preceding sentence, the value of intangible assets or rights
shall not enhance or be reflected in the value of that real property
interest, except that the real property interest may be assessed and
valued by assuming the presence of intangible assets and rights
necessary to put the real property interest to beneficial or
productive use.
23155. In the event that taxes, interest and penalties have been or
shall be assessed against, paid by or collected from a taxpayer
under a subdivision of Section 23151.1, which assessment, payment or
collection should have been made under a different subdivision, such
taxes, interest and penalties shall be considered as having been
assessed, paid or collected under such different subdivision as of
the date or dates they were made.
23151. (a) With the exception of banks and financial corporations,
every corporation doing business within the limits of this state and
not expressly exempted from taxation by the provisions of the
Constitution of this state or by this part, shall annually pay to the
state, for the privilege of exercising its corporate franchises
within this state, a tax according to or measured by its net income,
to be computed at the rate of 7.6 percent upon the basis of its net
income for the next preceding income year, or if greater, the minimum
tax specified in Section 23153.
(b) For calendar or fiscal years ending after June 30, 1973, the
rate of tax shall be 9 percent instead of 7.6 percent as provided by
subdivision (a).
(c) For calendar or fiscal years ending in 1980 to 1986,
inclusive, the rate of tax shall be 9.6 percent.
(d) For calendar or fiscal years ending in 1987 to 1996,
inclusive, and for any income year beginning before January 1, 1997,
the tax rate shall be 9.3 percent.
(e) For any income year beginning on or after January 1, 1997, the
tax rate shall be 8.84 percent. The change in rate provided in this
subdivision shall be made without proration otherwise required by
Section 24251.
(f) (1) For the first taxable year beginning on or after January
1, 2000, the tax imposed under this section shall be the sum of both
of the following:
(A) A tax according to or measured by net income, to be computed
at the rate of 8.84 percent upon the basis of the net income for the
next preceding income year, but not less than the minimum tax
specified in Section 23153.
(B) A tax according to or measured by net income, to be computed
at the rate of 8.84 percent upon the basis of the net income for the
first taxable year beginning on or after January 1, 2000, but not
less than the minimum tax specified in Section 23153.
(2) Except as provided in paragraph (1), for taxable years
beginning on or after January 1, 2000, the tax imposed under this
section shall be a tax according to or measured by net income, to be
computed at the rate of 8.84 percent upon the basis of the net income
for that taxable year, but not less than the minimum tax specified
in Section 23153.
23151.1. Notwithstanding Section 23151, every corporation (except
banks and financial corporations) doing business within the limits of
this state and not exempted from taxation by the provisions of the
Constitution of this state or by this part, shall annually pay to the
state for the privilege of exercising its corporate franchises
within this state, a tax determined as follows:
(a) With respect to corporations, other than those described in
subdivision (b), which commence doing business within the state after
December 31, 1971, and before January 1, 2000, the tax for the
taxable year of commencement, whether or not for 12 full months,
shall be the minimum franchise tax prescribed in Section 23153.
(b) If after December 31, 1972, a corporation commences to do
business and ceases doing business in the same taxable year, the tax
for that taxable year shall be according to or measured by its net
income for the year, to be computed at the rate prescribed in Section
23151.
(c) (1) With respect to taxable years beginning after December 31,
1972, and before January 1, 2000, other than the year of
commencement described in subdivision (a) or (b) or the year of
cessation described in subdivision (d), the tax for that taxable year
shall be according to or measured by its net income for the next
preceding taxable year, to be computed at the rate prescribed in
Section 23151.
(2) With respect to taxable years beginning on or after January 1,
2000, (other than the first taxable year beginning on or after that
date), the tax for the taxable year (including the taxable year of
commencement and the taxable year of cessation) shall be according to
or measured by its net income for the taxable year to be computed at
the rate prescribed in Section 23151.
(d) With respect to corporations which cease doing business in a
taxable year beginning after December 31, 1972, and before January 1,
2000, other than those described in subdivision (b), the tax for the
taxable year of cessation shall be:
(1) According to or measured by its net income for the next
preceding taxable year, to be computed at the rate prescribed in
Section 23151, plus
(2) According to or measured by its net income for the taxable
year during which the corporation ceased doing business, to be
computed at the rate prescribed in Section 23151.
(e) In any event, the tax for any taxable year shall not be less
than the minimum tax provided for in Section 23153 for that taxable
year.
23151.2. Notwithstanding Section 23151, every corporation (except
banks and financial corporations) not exempted from taxation by the
provisions of the Constitution of this state or by this part which
dissolves or withdraws, shall pay a tax for its taxable year of
dissolution or withdrawal according to or measured by its net income
for the taxable year in which it ceased doing business, unless that
income has previously been included in the measure of tax for any
taxable year, to be computed at the rate prescribed in Section 23151
for its taxable year of dissolution or withdrawal. In any event, the
tax for the taxable year of its dissolution or withdrawal shall not
be less than the minimum tax provided for in Section 23153 for that
taxable year.
23153. (a) Every corporation described in subdivision (b) shall be
subject to the minimum franchise tax specified in subdivision (d)
from the earlier of the date of incorporation, qualification, or
commencing to do business within this state, until the effective date
of dissolution or withdrawal as provided in Section 23331 or, if
later, the date the corporation ceases to do business within the
limits of this state.
(b) Unless expressly exempted by this part or the California
Constitution, subdivision (a) shall apply to each of the following:
(1) Every corporation that is incorporated under the laws of this
state.
(2) Every corporation that is qualified to transact intrastate
business in this state pursuant to Chapter 21 (commencing with
Section 2100) of Division 1 of Title 1 of the Corporations Code.
(3) Every corporation that is doing business in this state.
(c) The following entities are not subject to the minimum
franchise tax specified in this section:
(1) Credit unions.
(2) Nonprofit cooperative associations organized pursuant to
Chapter 1 (commencing with Section 54001) of Division 20 of the Food
and Agricultural Code that have been issued the certificate of the
board of supervisors prepared pursuant to Section 54042 of the Food
and Agricultural Code. The association shall be exempt from the
minimum franchise tax for five consecutive taxable years, commencing
with the first taxable year for which the certificate is issued
pursuant to subdivision (b) of Section 54042 of the Food and
Agricultural Code. This paragraph only applies to nonprofit
cooperative associations organized on or after January 1, 1994.
(d) (1) Except as provided in paragraph (2), paragraph (1) of
subdivision (f) of Section 23151, paragraph (1) of subdivision (f) of
Section 23181, and paragraph (1) of subdivision (c) of Section
23183, corporations subject to the minimum franchise tax shall pay
annually to the state a minimum franchise tax of eight hundred
dollars ($800).
(2) The minimum franchise tax shall be twenty-five dollars ($25)
for each of the following:
(A) A corporation formed under the laws of this state whose
principal business when formed was gold mining, which is inactive and
has not done business within the limits of the state since 1950.
(B) A corporation formed under the laws of this state whose
principal business when formed was quicksilver mining, which is
inactive and has not done business within the limits of the state
since 1971, or has been inactive for a period of 24 consecutive
months or more.
(3) For purposes of paragraph (2), a corporation shall not be
considered to have done business if it engages in other than mining.
(e) Notwithstanding subdivision (a), for taxable years beginning
on or after January 1, 1999, and before January 1, 2000, every
"qualified new corporation" shall pay annually to the state a minimum
franchise tax of five hundred dollars ($500) for the second taxable
year. This subdivision shall apply to any corporation that is a
qualified new corporation and is incorporated on or after January 1,
1999, and before January 1, 2000.
(1) The determination of the gross receipts of a corporation, for
purposes of this subdivision, shall be made by including the gross
receipts of each member of the commonly controlled group, as defined
in Section 25105, of which the corporation is a member.
(2) "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.
(3) "Qualified new corporation" means a corporation that is
incorporated under the laws of this state or has qualified to
transact intrastate business in this state, that begins business
operations at or after the time of its incorporation and that
reasonably estimates that it will have gross receipts, less returns
and allowances, reportable to this state for the taxable year of one
million dollars ($1,000,000) or less. "Qualified new corporation"
does not include any corporation that began business operations as a
sole proprietorship, a partnership, or any other form of business
entity prior to its incorporation. This subdivision shall not apply
to any corporation that reorganizes solely for the purpose of
reducing its minimum franchise tax.
(4) This subdivision shall not apply to limited partnerships, as
defined in Section 17935, limited liability companies, as defined in
Section 17941, limited liability partnerships, as defined in Section
17948, charitable organizations, as described in Section 23703,
regulated investment companies, as defined in Section 851 of the
Internal Revenue Code, real estate investment trusts, as defined in
Section 856 of the Internal Revenue Code, real estate mortgage
investment conduits, as defined in Section 860D of the Internal
Revenue Code, qualified Subchapter S subsidiaries, as defined in
Section 1361(b)(3) of the Internal Revenue Code, or to the formation
of any subsidiary corporation, to the extent applicable.
(5) For any taxable year beginning on or after January 1, 1999,
and before January 1, 2000, if a corporation has qualified to pay
five hundred dollars ($500) for the second taxable year under this
subdivision, but in its second taxable year, the corporation's gross
receipts, as determined under paragraphs (1) and (2), exceed one
million dollars ($1,000,000), an additional tax in the amount equal
to three hundred dollars ($300) for the second taxable year shall be
due and payable by the corporation on the due date of its return,
without regard to extension, for that year.
(f) (1) Notwithstanding subdivision (a), every corporation that
incorporates or qualifies to do business in this state on or after
January 1, 2000, shall not be subject to the minimum franchise tax
for its first taxable year.
(2) This subdivision shall not apply to limited partnerships, as
defined in Section 17935, limited liability companies, as defined in
Section 17941, limited liability partnerships, as defined in Section
17948, charitable organizations, as described in Section 23703,
regulated investment companies, as defined in Section 851 of the
Internal Revenue Code, real estate investment trusts, as defined in
Section 856 of the Internal Revenue Code, real estate mortgage
investment conduits, as defined in Section 860D of the Internal
Revenue Code, and qualified Subchapter S subsidiaries, as defined in
Section 1361(b)(3) of the Internal Revenue Code, to the extent
applicable.
(3) This subdivision shall not apply to any corporation that
reorganizes solely for the purpose of avoiding payment of its minimum
franchise tax.
(g) Notwithstanding subdivision (a), a domestic corporation, as
defined in Section 167 of the Corporations Code, that files a
certificate of dissolution in the office of the Secretary of State
pursuant to subdivision (b) of Section 1905 of the Corporations Code,
prior to its amendment by the act amending this subdivision, and
that does not thereafter do business shall not be subject to the
minimum franchise tax for taxable years beginning on or after the
date of that filing.
(h) The minimum franchise tax imposed by paragraph (1) of
subdivision (d) shall not be increased by the Legislature by more
than 10 percent during any calendar year.
(i) (1) Notwithstanding subdivision (a), a corporation that is a
small business solely owned by a deployed member of the United States
Armed Forces shall not be subject to the minimum franchise tax for
any taxable year the owner is deployed and the corporation 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 negative net income as defined in
Section 24341.
(C) "Small business" means a corporation 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.
23154. The tax imposed under this chapter is in lieu of all ad
valorem taxes and assessments of every kind and nature upon the
general corporate franchises of the corporations taxable under this
chapter but is not in lieu of any taxes or assessments upon real
property interests not otherwise exempted from taxation or
assessment, that are created by special franchises owned, held, or
used by those corporations. All those real property interests, not
otherwise exempted from taxation or assessment that are created by
those special franchises shall be assessed annually by the board, at
their actual value, in the same manner as is provided for the
assessment of other property to be assessed by that board under
Section 19 of Article XIII of the California Constitution, and shall
be subject to taxation to the same extent and in the same manner as
other property assessed under that constitutional provision by the
board. For purposes of assessing a real property interest pursuant to
the preceding sentence, the value of intangible assets or rights
shall not enhance or be reflected in the value of that real property
interest, except that the real property interest may be assessed and
valued by assuming the presence of intangible assets and rights
necessary to put the real property interest to beneficial or
productive use.
23155. In the event that taxes, interest and penalties have been or
shall be assessed against, paid by or collected from a taxpayer
under a subdivision of Section 23151.1, which assessment, payment or
collection should have been made under a different subdivision, such
taxes, interest and penalties shall be considered as having been
assessed, paid or collected under such different subdivision as of
the date or dates they were made.
