Present law levies a corporation franchise tax on domestic corporations and foreign corporations that exercise their charter, or are qualified to do business or actually do business in this state, or own or use any part or all of their capital, plant, or any other property in this state.
Proposed law provides for a 25 percent reduction in the corporation franchise tax rate in each year the combined corporation income and franchise tax collections exceed $600 million and money is deposited into the Revenue Stabilization Trust fund. The rate reduction shall be effective January first of the year following money being deposited into the Revenue Stabilization Trust Fund. Further provides the reductions are only allowed based upon collections during franchise tax periods beginning on or after January 1, 2025, and before January 1, 2031.
Proposed law clarifies that credits that were earned in a tax period prior to the repeal of the tax may continue to be used against that tax for any applicable period prior to the repeal of the tax.
Effective when the Act which originated as Senate Bill No. 6 of this 2023 Regular Session of the Legislature becomes effective.