CA AB2244

Reduces minimum franchise tax to $200 annually for dormant business entities and $50 annually for inactive business entities, effective January 1, 2015, down from the standard $800 minimum tax.

Defines "dormant business entity" as one organized under state law or qualified to do intrastate business that certifies under penalty of perjury it did not do business in the state for that taxable year.

Defines "inactive business entity" (excluding limited partnerships and limited liability partnerships) as one that reasonably believes it will not do business in the state for that taxable year.

Limits dormant and inactive business entity status to a combined maximum of five consecutive taxable years and imposes an additional $750 tax if an inactive business entity later does business in the state.

Excludes business entities that are directly or indirectly owned by entities subject to corporation tax or LLC tax from qualifying for reduced rates.