The 2020-21 Budget: Expanding the Minimum Franchise Tax Exemption

Mar 23, 2020 - We recommend rejecting the administration ’s proposal to exempt LLCs, LPs, and LLPs from paying the $ 800 m inimum franchise tax in their first year of business. Extending the exemption appears to be an inefficient way to promote small businesses.
https://lao.ca.gov/Publications/Report/4207

California’s First Film Tax Credit Program

Sep 29, 2016 - In our evaluation of the economic effects of the first film tax credit, we must account for two kinds of opportunity costs: The $800  million in foregone state tax revenue the government would have used for other purposes.
https://lao.ca.gov/Publications/Report/3502

The 2020-21 Spending Plan: Tax Changes

Oct 5, 2020 - Corporations, limited liability companies (LLCs), and many partnerships must pay an $800 minimum franchise tax annually, regardless of their net income. Prior law exempted new corporations from the minimum franchise tax in their first year of business.
https://lao.ca.gov/Publications/Report/4270

The 2019-20 May Revision: Sales Tax Exemptions for Diapers and Menstrual Products

May 12, 2019 - The state could use the resulting $8  million to fund roughly 800 child care slots. Under this alternative, the proposed $14  million reduction in local sales tax revenue would instead go to local programs as specified under current law.
https://lao.ca.gov/Publications/Report/4040

The 2023-24 Budget: California's Film Tax Credit

Feb 28, 2023 - The state had expected to issue a total of $800  million in credits under the first version of the program. Of that amount, the CFC issued a total $646  million in tax credits. This amount is less than expected because some productions (1)  were never made, (2)  did not complete production on time, or (3)  spent less on qualified expenses than anticipated.
https://lao.ca.gov/Publications/Report/4713

The 2020-21 May Revision: Revenue Proposals in the 2020-21 May Revision

May 20, 2020 - The Governor proposes that new noncorporate businesses be exempt from paying the minimum franchise tax of $800 in their first year. Corporations, limited liability companies (LLCs), and many partnerships are required to annually pay a minimum franchise tax, regardless of their net income.
https://lao.ca.gov/Publications/Report/4238

Evaluating State Economic Stimulus Proposals

Feb 1, 2021 - We found that the $ 800  m illion program may have increased the state ’s economic output by between $ 6  b illion and $ 10  b illion over ten years. Our report also highlighted key areas of uncertainty and additional factors the legislature should consider beyond the bottom line economic results of the analysis —such as opportunity costs and the policy objective of the program which was to strategically counter aggressive film tax credits offered by other states.
https://lao.ca.gov/Publications/Report/4331

Building Reserves to Prepare for a Recession

Mar 7, 2018 - In response to the earthquake, the state increased the sales tax by a quarter cent to raise $ 800  m illion ($1. 6  b illion in today ’s dollars) for disaster relief. Paterno Lawsuit. In a 2003 decision in Paterno v.
https://lao.ca.gov/Publications/Report/3769

Review of the California Competes Tax Credit

Oct 31, 2017 - Such policies could include (1)  reducing the corporate tax rate, (2)  reducing the minimum tax (under current law, nearly all business entities annually pay a minimum tax of $800 regardless of their net income), or (3)  other policy changes to improve the state ’s business climate generally.
https://lao.ca.gov/Publications/Report/3709

The 2021-22 Budget: Business Tax Incentives

Jan 28, 2021 - In 2019, only about one ‑quarter of the state corporation taxpayers owed more than the $ 800 m inimum franchise tax. Like all of the state ’s business tax credits, California Competes credits are not refundable.
https://lao.ca.gov/Publications/Report/4327