Community Property States:
A community property system is presently in effect in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin, with Alaska having an "elect-in" system.

Under a community property system, property acquired by a husband or wife during their marriage (except property acquired by gift, devise, or descent) is usually considered to be community property.  The community relationship is considered to be a form of a partnership (usually with one spouse acting as managing partner or agent for the community), both partners having vested, equal, and undivided interests in the community property.

Under IRS Revenue Procedure 2002-69 taxpayers residing in community property States have the option to elect to treat a newly formed, husband/wife owned, LLC as a multi-member LLC or as a SMLLC.

California July 26, 2005 - Personal Income Tax: Governor Vetoes Bill That Would Have Clarified Reporting Requirement

California Governor Arnold Schwarzenegger has vetoed a bill that would have clarified that individuals who are subject to California's personal income tax must report all federal income tax adjustments to the California Franchise Tax Board (FTB) that increase the amount of tax due, without regard to whether the statute of limitations for mailing proposed deficiency assessments has expired. The bill was intended to be declaratory of existing law.

In his veto message, the Governor stated that he was unable to support the bill because it would change tax policy retroactively and would address an issue pending before the California Supreme Court (see Ordlock v. Franchise Tax Board, California Court of Appeal, Second Appellate District, No. B169465, July 28, 2004, modified August 24, 2004; petition for review granted, California Supreme Court, No. S127649, December 1, 2004; TAXDAY, 2004/07/30, S.2). However, the Governor indicated that he was not opposed to the policy outlined in the bill and would be willing to consider a bill that applies the policy prospectively.

In Ordlock v. Franchise Tax Board, a California court of appeal held that a taxpayer was not required to notify the FTB of a federal change in a case where the general four-year statute of limitations had expired at the time of the final federal determination and, therefore, the taxpayer was not subject to a California deficiency assessment. According to the FTB, which sponsored the vetoed bill, the failure to enact the bill and a decision by the California Supreme Court to uphold Ordlock would encourage taxpayers who are audited by the Internal Revenue Service (IRS) to refrain from reporting the results to the FTB with the hope that the FTB will not be notified of the results by the IRS before the normal statute of limitations expires.

A.B. 1630, vetoed July 26, 2005; Veto Message, Governor Arnold Schwarzenegger, July 26, 2005; Bill Analysis, Senate Floor, June 13, 2005

Search for information by State:
http://www.sba.gov/hotlist/businessnames.html

Search to see if the entity name you wish to use is available in the USA: http://www.knowx.com/infoam.exe?form=corp/search.htm&userid=guest&password=welcome

State Secretary of the State Web Sites:
http://www.coordinatedlegal.com/SecretaryOfState.html   backup page

State Tax Department Web Sites:
http://www.ct.gov/drs/cwp/view.asp?a=1456&q=266120

State Tax Department Web Sites:
http://www.statelocalgov.net/state-ct.htm

State Tax Form Web Sites:
http://www.taxadmin.org/fta/link/forms.html

State Sales Tax Department Web Sites:
http://www.olivierandassociates.com/homepage/allstateslinks.html

State Tax-Free Sales Tax Holidays:
StateTaxFreeOffers.pdf

State Motor Vehicle Department Web Sites:
http://www.drivershandbook.com/handbooks/usa/

All 50 States' and D.C.'s Home Pages and Workers' Compensation Agencies:
http://www.comp.state.nc.us/ncic/pages/all50.htm

How To File For Homestead Exemption:
http://www.assetprotectionbook.com/homestead_exemptions.htm

California Sales tax information:
http://www.olivierandassociates.com/homepage/casalestax.html
http://www.boe.ca.gov/sutax/staxregs.htm
http://www.boe.ca.gov/sutax/sutprograms.htm


California Corporation Taxes FAQ:
http://www.ftb.ca.gov/forms/misc/1083.pdf


California Business Forms:
http://www.sos.ca.gov/business/bpd_forms.htm
 

CA website for LLC's including taxes & fees
What is the limited liability company annual tax?  The limited liability company annual tax is $800. To be subject to the tax, the limited liability company must, for a least one day during the year, be:  Doing business in California, and/or Registered with the California Secretary of State.  This $800 tax is deductible for IRS purposes, but not deductible for CA income tax purposes.

What is the limited liability company fee? Limited liability companies are subject to a fee under the same circumstances that they become subject to the annual tax.  The fee was based on the limited liability company’s annual "total income" from worldwide sources (until a law change became effective for taxable years beginning on or after January 1, 2007). Total income was not apportioned or allocated based on the operations in California.  Total Income: Total income is defined as gross income plus cost of goods. The fee is deductible for both IRS purposes and for CA income tax purposes.

Update: Effective October 10, 2007, Assembly Bill No. 198 (AB 198 codified at California Revenue and Taxation Code Section 17942) amends California law to provide that this annual fee will be calculated solely on the "total income derived from or attributable to" California, and will exclude from this calculation such income derived from or attributable to other states.

Under the revised law, "total income from all sources derived from or attributable to" California will be calculated using existing rules that determine how sales (which also include services) are assigned between California and other states in arriving at a "sales factor" that is then used in allocating income to California. AB 198, however, prohibits the application of those existing rules that exclude certain receipts from the sales factor. Once a company's "total income" from California is determined, the following chart may be used to calculate the amount of the LLC fee:

AB 198 is effective immediately and applies to taxable years beginning on or after January 1, 2007.

There were two cases pending before the California Court of Appeals on the issue of whether the annual LLC fee, as a whole, is unconstitutional because it is discriminatory or unfairly apportioned. AB 198 creates a refund mechanism to be used by taxpayers should the LLC fee be finally adjudged to be unconstitutional. Any refund will be limited to the refund amount needed to remedy the discrimination or unfair apportionment.

CA website for S-Corps including taxes & fees
What is the tax rate for S corporations? The annual tax for S corporations is the greater of 1.5 percent of the corporation's net income or $800. Newly incorporated or qualified corporations are exempt from the annual minimum franchise tax for their first year of business.

Limited Liability Companies Treated as S Corporations.  A limited liability company that is classified as an association and taxable as a corporation for federal purposes may elect S corporation status. The LLC will also be treated as an S corporation for the state and must file Form 100S (California S Corporation Franchise or Income Tax Return). California and federal laws treat these companies as corporations subject to California corporation tax law.

CA website for C-Corps including taxes & fees
What is the tax rate for C corporations?  The annual tax for C corporations is the greater of 8.84% of the corporation's net income or $800. Newly incorporated or qualified corporations are exempt from the annual minimum franchise tax for their first year of business.

Limited Liability Companies Treated as C Corporations.  A limited liability company that is classified as an association and taxable as a corporation for federal purposes must file Form 100 (California Corporation Franchise or Income Tax Return). California and federal laws treat these LLC's as corporations subject to California corporation tax law.

What is an investment club?

Certain partnerships are allowed to make an election to be excluded from the partnership provisions. These partnerships are often referred to as "investment clubs" because, in order to qualify, they generally have investment activities. They cannot be operating a trade or business.

Caution: Do not confuse investment clubs with investment partnerships. For more information about investment partnerships, please see the instructions for form 565.

Limited liability company annual tax: Limited liability companies may qualify and make an election under the investment club provisions. However, such an election does not exempt them from the limited liability company annual tax.

Limited liability companies must still file California returns for tax years after making the election. However, they only need to complete the entity information and pay any amounts due.

http://www.taxes.ca.gov/Income_Tax/limliacobus.shtml

What Is an Investment Club?

Certain partnerships are allowed to make an election to be excluded from the partnership provisions. These partnerships are often referred to as "investment clubs" because, in order to qualify, they generally have investment activities. They cannot operate a trade or business.

Caution: Investment clubs and investment partnerships are not the same. For more information about investment partnerships, please see the instructions for form 565.

Limited partnership annual tax: Limited partnerships may qualify and make an election under the investment club provisions. However, such an election does not exempt them from the limited partnership annual tax.

Limited partnerships must still file California returns for tax years after making the election. However, they only need to complete the entity information and pay any amounts due.

http://www.taxes.ca.gov/Income_Tax/limitedpartbus.shtml

Information about taxes for individuals in CA: http://www.taxes.ca.gov/Income_Tax/index.shtml

"My account" balance due and payments information in CA: http://www.taxes.ca.gov/Income_Tax/index.shtml

Information about taxes for trades or businesses in CA: http://www.ss.ca.gov/business/business.htm
Up-to-date Entity Mail Processing Times in CA: http://www.ss.ca.gov/business/bpd_processing_times.htm


Information about taxes for business entities in CA: http://www.taxes.ca.gov/index2.html
Information about taxes for business entities in CA: http://www.taxes.ca.gov/incbus.html
Information about LLCs in CA: http://www.ss.ca.gov/business/llc/llc_faq.htm
Information about Corporations in CA: http://www.ss.ca.gov/business/corp/corp_faq.htm
Information about Partnerships in CA: http://www.ss.ca.gov/business/gp/gp_faq.htm

Information about CA renter's credit: http://www.ftb.ca.gov/individuals/faq/ivr/203.html

California County, City & Town taxes: http://www.statelocalgov.net/state-ca.htm


Read about the advantages and disadvantages of six types of business organizations from proprietorship to incorporation:  http://www.ss.ca.gov/business/filings.htm


Payroll tax information, if you have a separate entity (corporation) that you trade through: http://www.edd.ca.gov/taxind.htm

Information about CA tax amnesty February 1, 2005 through March 31, 2005: http://www.ftb.ca.gov/amnesty/index.html


Search to see if the entity name you wish to use is available: http://kepler.ss.ca.gov/list.html
http://www.ss.ca.gov/business/llc/llc_naav.htm


Discover what's new in Business tax law, or scroll through general information on taxes and businesses. Download forms. http://www.ftb.ca.gov/forms/index.html


Download California tax forms for partnerships and limited liability companies. http://www.ftb.ca.gov/forms/misc/3556.html

Click here to see newspaper story about California non-filers.

Click here for additional CA information, LLC formation and the 25102(f) notice.

Click here for the CA form 568 LLC tax return booklet.

CA Net Operating Losses (NOL) differ from the IRS's NOL rules:
http://www.taxalmanac.org/index.php/CA_-_NOL_Deductions_Suspended_then_Reinstated

http://www.calchamber.com/GovernmentRelations/IssueReports/Documents/IssuesSummaries/09-IssueSummariesNetOperatingLoss.pdf

http://www.ftb.ca.gov/law/legis/07_08bills/ab135_011607.pdf

Starting with 2008 and through 2010 CA has a two-year suspension of the corporation franchise and income tax net operating loss (NOL) deduction, which would then be followed by a phased-in conformity to the federal NOL carryback and carryover periods; and enactment of a modified tax amnesty.

http://www.ftb.ca.gov/forms/misc/3556.html
http://www.ftb.ca.gov/forms/misc/3556.pdf
LLCs classified as partnerships or disregarded entities are subject to an $800 annual tax if they are doing business in California, or the California Secretary of State accepts their articles of organization or certificate of registration. The annual tax is pre-paid for the privilege of doing business in California and is due on the 15th day of the fourth month after the beginning of the taxable year. LLCs must file a Limited Liability Company Tax Voucher (FTB 3522) to pay the annual tax.

First Year Annual Tax Due Date:

• A domestic LLC has until the 15th day of the fourth* month after filing its articles of organization with the Secretary of State to pay the first year annual tax.   *we believe CA writers do not understand English and math.   and we suggest taxpayers consider paying by the 15th day of the third month after (or the fourth month of).
• A domestic LLC has until the 90th day after filing its articles of organization with the Secretary of State to pay a $20 Secretary of the State fee.

LLCs are also subject to an annual fee based on their total income. (tentatively declared unconstitutional March 3, 2006).  Total income is defined as the sum of worldwide gross income plus cost of goods sold (California Revenue and Taxation Code Section 24271). The LLC fee is due on the original due date of the return, which is the 15th day of the fourth month following the close of its taxable year. Use Form 568 (Limited Liability Company Return of Income) to report income and the fee.

Pay the annual $800 LLC tax on CA form 3522 subject to a late payment penalty plus interest.  Due by 15th day of 4th month of the taxable year.  i.e. it is due before the end of the year.

Pay the biennial $20 LLC tax on CA SOS form LLC-12 subject to a $250 late filing penalty.


Pay the annual $800 Limited Partnership tax with form CA form 565 or with extension CA form 3538.  Due by 15th day of 4th month following the taxable year.  i.e. it is due after the end of the year.


General Partnerships are exempt for the $800 annual tax and the annual fee on income.



http://www.taxes.ca.gov/CorpS.html
The annual tax for S corporations is the greater of 1.5 percent of the corporation’s net income or $800.Note: As of January 1, 2000, newly incorporated or qualified corporations are exempt from the annual minimum franchise tax for their first year of business.



On March 3, 2006, a San Francisco Superior Court ruled that the "fee" imposed by California on LLC gross income is a "tax" that is unconstitutional because it is not fairly apportioned. Northwest Energetic Services, LLC v. California Franchise Tax Board (Cal. Super. Ct. No. CGC-05-437721).

Four year Statute of Limitations explained here:
http://www.ftb.ca.gov/professionals/taxnews/2010/April/Article_12.shtml
http://www.ftb.ca.gov/law/summaries/SOL_Refund.pdf

Protective Refund Claim form: http://www.gtlaw.com/pub/alerts/2006/0401.pdf to be faxed to CA @ 916-845-9796  or click  http://www.venulex.com/viewdoc.asp?documentID=5381 for another site.


update:
AB 198 was signed by the Governor on October 9, 2007

The California Legislature has enacted a new law that addresses the constitutionality of the state's limited liability corporation (LLC) fee scheme. Specifically, the new legislation bases the LLC fee on LLCs' income derived from income in-state, rather than on worldwide gross receipts without apportionment. It also codifies a state court decision to ensure that only refunds of the fee collected in violation of the U.S. Constitution will be refunded. ( L. 2007, A198, eff. 10/10/2007 .)