CA AB2126

Reduces minimum franchise tax from $800 to $0 for the first taxable year and $100 annually for the following nine taxable years for small businesses (gross receipts of $1,000,000 or less) that first commence operations between January 1, 2011 and January 1, 2016.

Applies exemption to corporations, limited partnerships, limited liability companies, and limited liability partnerships that qualify as small businesses under the definition provided.

Defines "small business" as any taxpayer with gross receipts less returns and allowances reportable to California of $1,000,000 or less in the previous taxable year.

Exemption does not apply to entities that reorganize solely for the purpose of reducing their minimum franchise tax obligation.

Specifies detailed exclusions from gross receipts calculation, including loan repayments, stock issuances, litigation damages, tax refunds, and certain investment transactions.