Fox & Hounds: Smaller Footprint Should Equal Small Tax

Monday, June 17 2019

Legislation (SB 349) by Senator Anthony Portantino, adjusts the franchise fee for small business to relate more to the size of the company rather than requiring the same fee for all businesses regardless of their size.

California’s 3.6 million small businesses make up the state’s economic backbone, employing roughly half the state’s workforce. Individually, however, small businesses are stretched facing higher tax burdens and seeing no relief from federal tax changes. Existing California law imposes an annual minimum franchise tax (MFT) of $800 on any business incorporated in California, regardless of whether their gross revenue is $2.5 million or $25 billion – a small coffee shop in the Central Valley is on the hook for the same minimum franchise tax fee as a tech giant in Silicon Valley.

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