CA AB1889

Reduces the minimum franchise tax to $400 for the second taxable year for new corporations that are small businesses (with gross receipts of $5,000 or less), effective for taxable years beginning on or after January 1, 2015.

Reduces the annual tax to $400 for the first taxable year for new limited partnerships, limited liability companies, and limited liability partnerships that are small businesses (with gross receipts of $5,000 or less), effective for taxable years beginning on or after January 1, 2015.

Defines "small business" as a business entity that will have gross receipts of $5,000 or less reportable to the state for the taxable year.

Requires an additional $400 tax if a small business's gross receipts exceed $5,000 in the applicable taxable year.

Applies only to entities that file timely returns and have not reorganized solely to reduce their tax liability.