2005 California Revenue and Taxation Code Sections 17941-17946 CHAPTER 10.6. TAX AND FEES ON LIMITED LIABILITY COMPANIES ...

17941.  (a) For each taxable year beginning on or after January 1,
1997, a limited liability company doing business in this state (as
defined in Section 23101) shall pay annually to this state a tax for
the privilege of doing business in this state in an amount equal to
the applicable amount specified in paragraph (1) of subdivision (d)
of Section 23153 for the taxable year.
   (b) (1) In addition to any limited liability company that is doing
business in this state and is therefore subject to the tax imposed
by subdivision (a), for each taxable year beginning on or after
January 1, 1997, a limited liability company shall pay annually the
tax prescribed in subdivision (a) if articles of organization have
been accepted, or a certificate of registration has been issued, by
the office of the Secretary of State.  The tax shall be paid for each
taxable year, or part thereof, until a certificate of cancellation
of registration or of articles of organization is filed on behalf of
the limited liability company with the office of the Secretary of
State.
   (2) If a taxpayer files a return with the Franchise Tax Board that
is designated as its final return, the Franchise Tax Board shall
notify the taxpayer that the annual tax shall continue to be due
annually until a certificate of cancellation is filed with the
Secretary of State pursuant to Section 17356 or 17455 of the
Corporations Code.
   (c) The tax assessed under this section shall be due and payable
on or before the 15th day of the fourth month of the taxable year.
   (d) For purposes of this section, "limited liability company"
means an organization, other than a limited liability company that is
exempt from the tax and fees imposed under this chapter pursuant to
Section 23701h or Section 23701x, that is formed by one or more
persons under the law of this state, any other country, or any other
state, as a "limited liability company" and that is not taxable as a
corporation for California tax purposes.
   (e) Notwithstanding anything in this section to the contrary, if
the office of the Secretary of State files a certificate of
cancellation pursuant to Section 17350.5 of the Corporations Code for
any limited liability company, then paragraph (1) of subdivision (f)
of Section 23153 shall apply to that limited liability company as if
the limited liability company were properly treated as a corporation
for that limited purpose only, and paragraph (2) of subdivision (f)
of Section 23153 shall not apply.  Nothing in this subdivision
entitles a limited liability company to receive a reimbursement for
any annual taxes or fees already paid.
17942.  (a) In addition to the tax imposed under Section 17941,
every limited liability company subject to tax under Section 17941
shall pay annually to this state a fee equal to:
   (1) Nine hundred dollars ($900), if the total income from all
sources reportable to this state for the taxable year is two hundred
fifty thousand dollars ($250,000) or more, but less than five hundred
thousand dollars ($500,000).
   (2) Two thousand five hundred dollars ($2,500), if the total
income from all sources reportable to this state for the taxable year
is five hundred thousand dollars ($500,000) or more, but less than
one million dollars ($1,000,000).
   (3) Six thousand dollars ($6,000), if the total income from all
sources reportable to this state for the taxable year is one million
dollars ($1,000,000) or more, but less than five million dollars
($5,000,000).
   (4) Eleven thousand seven hundred ninety dollars ($11,790), if the
total income from all sources reportable to this state for the
taxable year is five million dollars ($5,000,000) or more.
   (5) This subdivision shall apply to taxable years beginning on or
after January 1, 1997.
   (6) The changes made to this subdivision by the act adding this
paragraph shall apply to taxable years beginning on or after January
1, 2001.
   (b) (1) For purposes of this section, "total income" means gross
income, as defined in Section 24271, plus the cost of goods sold that
are paid or incurred in connection with the trade or business of the
taxpayer.  However, "total income" shall not include allocation or
attribution of income or gain or distributions made to a limited
liability company in its capacity as a member of, or holder of an
economic interest in, another limited liability company if the
allocation or attribution of income or gain or distributions are
directly or indirectly attributable to income that is subject to the
payment of the fee described in this section.
   (2) In the event a taxpayer is a commonly controlled limited
liability company, the total income from all sources reportable to
this state, taking into account any election under Section 25110, may
be determined by the Franchise Tax Board to be the total income of
all the commonly controlled limited liability company members if it
determines that multiple limited liability companies were formed for
the primary purpose of reducing fees payable under this section.  A
determination by the Franchise Tax Board under this subdivision may
only be made with respect to one limited liability company in a
commonly controlled group.  However, each commonly controlled limited
liability company shall be jointly and severally liable for the fee.
  For purposes of this section, commonly controlled limited liability
companies shall include the taxpayer and any other partnership or
limited liability company doing business (as defined in Section
23101) in this state and required to file a return under Section
18633 or 18633.5, in which the same persons own, directly or
indirectly, more than 50 percent of the capital interests or profits
interests.
   (c) The fee assessed under this section shall be due and payable
on the date the return of the limited liability company is required
to be filed under Section 18633.5, shall be collected and refunded in
the same manner as the taxes imposed by this part, and shall be
subject to interest and applicable penalties.
17943.  It is the intent of the Legislature that the amount of the
annual fee described in Section 17942 shall apply to the taxable year
beginning January 1, 2001, and subsequent taxable years,
notwithstanding the results of any study prepared by the Franchise
Tax Board and submitted to the Joint Legislative Budget Committee
pursuant to former Section 17943.
17944.  (a) The effective date of dissolution, withdrawal, or
cancellation of a limited liability company is the date on which the
certified copy of the court decree, judgment, or order declaring the
limited liability company duly wound up and dissolved is filed in the
office of the Secretary of State or the date on which the
certificate of winding up and dissolution is filed in the office of
the Secretary of State.  For the purposes of this chapter, the
effective date of cancellation of registration of a foreign limited
liability company is the date on which the certificate of
cancellation of registration is filed in the office of the Secretary
of State.
   (b) The Secretary of State shall, through an information program
and by forms and instructions, recommend that all required documents
filed with the Secretary of State be sent, if mailed, by certified
mail with return receipt requested.  The Secretary of State shall
also notify persons that receipt of documents by the Secretary of
State will be acknowledged within 21 days of receipt.
   (c) On or before 21 days after their receipt, the Secretary of
State shall provide a payer with acknowledgment of the receipt of
documents submitted by a limited liability company pursuant to this
chapter.
17945.  No decree of dissolution, withdrawal, or cancellation shall
be made and entered by any court, nor shall the county clerk of any
county or the Secretary of State file any decree of dissolution,
withdrawal, or cancellation or any other document by which the term
of existence of the limited liability company shall be reduced or
terminated, except as provided in subdivision (b) of Section 17350.5
of the Corporations Code, nor shall the Secretary of State file any
certificate of the surrender or cancellation by a foreign limited
liability company of its rights to do intrastate business in this
state unless the limited liability company obtains from the Franchise
Tax Board and files with the court, county clerk, or Secretary of
State, as the case may be, a tax clearance certificate indicating
that the Franchise Tax Board is satisfied from the available evidence
that all taxes and fees imposed by this chapter or all taxes imposed
by Part 11 (commencing with Section 23001) have been paid or are
secured by bond, deposit, or otherwise.  Within 30 days after
receiving a request for a certificate, the Franchise Tax Board shall
either issue the certificate or notify the person requesting the
certificate of the amount of tax or fees that must be paid or the
amount of bond, deposit, or other security that must be furnished as
a condition of issuing the certificate.  The issuance of the
certificate shall not relieve the taxpayer or any individual, bank,
or corporation from liability for any taxes, fees, penalties, or
interest imposed by this part or Part 11 (commencing with Section
23001).  The Franchise Tax Board shall furnish a copy of the tax
clearance certificate to the Secretary of State.
17946.  A limited liability company shall not be subject to the
taxes and fees imposed by this chapter if the limited liability
company did no business in this state during the taxable year and the
taxable year was 15 days or less.