AB-2084 • 2026

Corporation Tax Law: tax-exempt organizations: revocation of tax-exempt status.

Taxes

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Bauer-Kahan
Last action: 2026-06-03
Official status: Referred to Com. on REV. & TAX.
Effective date: Not listed

Plain English Breakdown

The bill summary and digest do not provide specific details on how many organizations will be affected or what happens when the board retains an exemption for other reasons.

Rules for Nonprofit Organizations' Tax Status

The bill changes the rules about when nonprofit organizations can keep their tax-exempt status in California.

What This Bill Does

Changes how the Franchise Tax Board decides if a nonprofit organization can keep its state tax-exempt status based on federal revocation reasons.
Allows the board to retain an organization's state tax exemption if the federal government revokes it for reasons other than fraud, intentional misrepresentation, misuse or diversion of funds, failure to file necessary returns or reports, or significant breaches of reporting and governance requirements.

Who It Names or Affects

Nonprofit organizations in California
The Franchise Tax Board

Terms To Know

Franchise Tax Board: A state agency that collects taxes and enforces tax laws.
Tax-exempt status: When an organization does not have to pay certain taxes because it serves a public purpose.

Limits and Unknowns

The bill does not specify what happens if the board decides to keep an exemption for reasons other than those listed.
It is unclear how many organizations will be affected by this change.

Bill History

2026-06-03 California Legislative Information
Referred to Com. on REV. & TAX.
2026-05-21 California Legislative Information
In Senate. Read first time. To Com. on RLS. for assignment.
2026-05-21 California Legislative Information
Read third time. Passed. Ordered to the Senate. (Ayes 56. Noes 16.)
2026-05-18 California Legislative Information
Read second time. Ordered to third reading.
2026-05-14 California Legislative Information
From committee: Do pass. (Ayes 11. Noes 3.) (May 14).
2026-05-14 California Legislative Information
Joint Rule 62(a), file notice suspended.
2026-05-13 California Legislative Information
In committee: Set, first hearing. Referred to APPR. suspense file.
2026-04-28 California Legislative Information
From committee: Do pass and re-refer to Com. on APPR. (Ayes 5. Noes 2.) (April 27). Re-referred to Com. on APPR.
2026-04-21 California Legislative Information
Re-referred to Com. on REV. & TAX.
2026-04-20 California Legislative Information
From committee chair, with author's amendments: Amend, and re-refer to Com. on REV. & TAX. Read second time and amended.
2026-04-13 California Legislative Information
In committee: Set, second hearing. Referred to REV. & TAX. suspense file.
2026-04-06 California Legislative Information
In committee: Set, first hearing. Hearing canceled at the request of author.
2026-04-06 California Legislative Information
Re-referred to Com. on REV. & TAX.
2026-03-27 California Legislative Information
From committee chair, with author's amendments: Amend, and re-refer to Com. on REV. & TAX. Read second time and amended.
2026-03-02 California Legislative Information
Referred to Com. on REV. & TAX.
2026-02-19 California Legislative Information
From printer. May be heard in committee March 21.
2026-02-18 California Legislative Information
Read first time. To print.

Official Summary Text

AB 2084, as amended, Bauer-Kahan.
Corporation Tax Law: tax-exempt organizations: revocation of tax-exempt status.
Existing law, the Corporation Tax Law, exempts organizations that are organized and operated for nonprofit purposes, as specified, from taxes imposed by that law if the Franchise Tax Board issues a determination exempting the organization from tax, except as provided. To receive a determination of exemption from the board, existing law requires the organization to either submit an application for exemption or to submit documentation of exemption from federal income tax law, as provided. For organizations that submit documentation of their federal exemption, existing law requires the board to suspend or revoke, as applicable, an organization’s state exemption upon notification that the organization’s federal exemption is suspended or revoked.
This bill would instead authorize the board, in its discretion, to retain the organization’s tax-exempt
status for state income tax purposes if it determines this suspension or revocation occurred for reasons other than fraud, intentional misrepresentation, misuse or diversion of organizational funds, failure to file necessary returns or reports, or other
significant
breaches of organizational reporting or governance requirements.
This bill would take effect immediately as a tax levy.

Current Bill Text

Read the full stored bill text

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