§ 19910. — 19910. (Added by Stats. 2025, Ch. 17, Sec. 17.)

California § 19910.

• Jurisdiction: California
• Code RTC: Revenue and Taxation Code - RTC
• Div. 2.: DIVISION 2. OTHER TAXES
• Part 10.4.1.: PART 10.4.1. Small Business Relief Act

Text

(a)
(1)
For taxable years beginning on or after January 1, 2026, and before January 1, 2031, a qualified entity doing business in this state, as defined in Section 23101, and that is required to file a return under Section 18633, 18633.5, or subdivision (a) of Section 18601, may elect to annually pay an elective tax according to or measured by its qualified net income, defined in paragraph (2), computed at the rate of 9.3 percent for the taxable year for which the election is made.
(2)
For purposes of this section, the “qualified net income” of a qualified entity means the sum of the pro rata share or distributive share of income, and any guaranteed
payments, as described by Section 707(c) of the Internal Revenue Code, relating to guaranteed payments, subject to tax under Part 10 (commencing with Section 17001) for the taxable year of each qualified taxpayer, as defined in Section 17052.11.
(b)
(1)
The elective tax authorized by this part shall be in addition to, and not in place of, any other tax or fee required to be paid under Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001).
(2)
The elective tax described in this part shall be assessed and collected under Part 10.2 (commencing with Section 18401).
(3)
Unless the
context otherwise requires, the definitions set forth in this part and those in Part 10 (commencing with Section 17001), Part 10.2 (commencing with Section 18401), or Part 11 (commencing with Section 23001) shall apply.
(c)
(1)
The qualified entity may include in its qualified net income the pro rata share or distributive share of the income of any of its partners, shareholders, or members upon their consent. A partner, shareholder, or member that does not consent does not prevent the qualified entity from making an election to pay the elective tax.
(2)
All partners, shareholders, and members of the qualified entity shall be bound by the election made under this part for the taxable year.
(d)
The election shall be irrevocable and shall be made on an original, timely filed return required under Part 10.2 (commencing with Section 18401) for the taxable year of the election in the form and manner as prescribed by the Franchise Tax Board.

Legislative History

Added by Stats. 2025, Ch. 17, Sec. 17. (SB 132) Effective June 27, 2025. Conditionally operative pursuant to Section 19916. Conditionally repealed pursuant to Section 19916.