California has a minimum tax of $800 on all corporations, and imposes
the same $800 as a fee for LLCs.

I have a question on LLCs taxed as S-corporations. The state waives
the minimum tax on newly formed or qualified S corporations filing an
initial return for their first taxable year. But does that waiver
apply to LLCs electing to be taxed as S-corporations? On the FTB's web
page dealing with LLCs they don't mention that the waiver applies to
them. But I just want to be certain that I'm not getting this wrong.

Thanks.

--
Stu
http://DownToEarthLawyer.com

--
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On 9/27/21 9:40 AM, Stuart O. Bronstein wrote:

California has a minimum tax of $800 on all corporations, and imposes
the same $800 as a fee for LLCs.

I have a question on LLCs taxed as S-corporations. The state waives
the minimum tax on newly formed or qualified S corporations filing an
initial return for their first taxable year. But does that waiver
apply to LLCs electing to be taxed as S-corporations? On the FTB's web
page dealing with LLCs they don't mention that the waiver applies to
them. But I just want to be certain that I'm not getting this wrong.

Thanks.

In Mid 2020 AB 85 was signed into law. From the Legislative Analysts description:

This bill, for taxable years beginning on or after January 1, 2020, and
before January 1, 2024, in which a specified appropriation is made in
any budget measure, would exempt a limited partnership, a limited
liability partnership, and limited liability company that files,
registers, or organizes to do business in this state, as provided, from
the payment of the annual tax in its first taxable year.

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2011) - All rights reserved. >>
<< ------------------------------------------------------- >>

--- SoupGate-Win32 v1.05
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Alan <[email protected]> wrote:

Stuart O. Bronstein wrote:

California has a minimum tax of $800 on all corporations, and
imposes the same $800 as a fee for LLCs.

I have a question on LLCs taxed as S-corporations. The state
waives the minimum tax on newly formed or qualified S
corporations filing an initial return for their first taxable
year. But does that waiver apply to LLCs electing to be taxed as
S-corporations? On the FTB's web page dealing with LLCs they
don't mention that the waiver applies to them. But I just want
to be certain that I'm not getting this wrong.

In Mid 2020 AB 85 was signed into law. From the Legislative
Analysts description:

This bill, for taxable years beginning on or after January 1,
2020, and before January 1, 2024, in which a specified
appropriation is made in any budget measure, would exempt a
limited partnership, a limited liability partnership, and limited
liability company that files, registers, or organizes to do
business in this state, as provided, from the payment of the
annual tax in its first taxable year.

Thanks. I found that after I posted the question. But the question
still remains for LLCs filed after 2024. What was the prior rule?
As far as I can tell, an LLC that elected to be taxed as an S-
corporation did not qualify for the first year S-corporation waiver.

--
Stu
http://DownToEarthLawyer.com

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2011) - All rights reserved. >>
<< ------------------------------------------------------- >>

--- SoupGate-Win32 v1.05
* Origin: fsxNet Usenet Gateway (21:1/5)

On 9/29/21 3:00 PM, Stuart O. Bronstein wrote:

Alan <[email protected]> wrote:

Stuart O. Bronstein wrote:

California has a minimum tax of $800 on all corporations, and
imposes the same $800 as a fee for LLCs.

I have a question on LLCs taxed as S-corporations. The state
waives the minimum tax on newly formed or qualified S
corporations filing an initial return for their first taxable
year. But does that waiver apply to LLCs electing to be taxed as
S-corporations? On the FTB's web page dealing with LLCs they
don't mention that the waiver applies to them. But I just want
to be certain that I'm not getting this wrong.

In Mid 2020 AB 85 was signed into law. From the Legislative
Analysts description:

This bill, for taxable years beginning on or after January 1,
2020, and before January 1, 2024, in which a specified
appropriation is made in any budget measure, would exempt a
limited partnership, a limited liability partnership, and limited
liability company that files, registers, or organizes to do
business in this state, as provided, from the payment of the
annual tax in its first taxable year.

Thanks. I found that after I posted the question. But the question
still remains for LLCs filed after 2024. What was the prior rule?
As far as I can tell, an LLC that elected to be taxed as an S-
corporation did not qualify for the first year S-corporation waiver.

Yes, the prior rule required the LLC minimum fee. AB 85 was designed to equalize the playing field.

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2011) - All rights reserved. >>
<< ------------------------------------------------------- >>

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* Origin: fsxNet Usenet Gateway (21:1/5)