Assemblyman Tri Ta (AD 70) announced the introduction of AB 778, which will defer the $800 minimum franchise tax on a new small business until the business has gross revenues of at least $20,000 in a taxable year.
“The pandemic has been difficult for all of us, but California’s small businesses have been hit the hardest,” said Ta. “AB 778 would allow businesses to open in California and become viable before being hit with an annual tax.”
A minimum franchise tax of $800 is imposed on virtually all businesses operating in California, and can be much higher based on earnings. This is among the highest rates in the country.
California’s vital small business owners and their employees have been devastated by the COVID-19 pandemic and the state’s mandated closures. Excessive taxes and burdensome regulations have prompted tens of thousands of small businesses to leave the state or close their doors altogether.
“AB 778 would assist eager Californians who take that chance in opening up their own business. Thriving businesses are critical for our state’s economy,” stated Ta.