AB 2671 Summary

• Exempts corporations and limited liability companies (LLCs) that are small businesses solely owned by deployed United States Armed Forces members from paying the $800 minimum franchise tax when the business operates at a loss or ceases operation during the owner's deployment.

• Defines "deployed" as being called to active duty or active service during periods when a Presidential Executive order specifies the United States is engaged in combat or homeland defense, excluding temporary training duty and permanent change of station.

• Defines "small business" as a corporation or LLC with total income from all sources derived from or attributable to California of $250,000 or less.

• Exemption applies only while the owner is deployed and the business operates at a loss or ceases operation; exemption becomes inoperative for taxable years beginning on or after January 1, 2018.

• Authorizes the Franchise Tax Board to promulgate regulations to implement the exemption, including defining what constitutes "ceases operation."