Annual tax: partnerships and LLCs.

Taxes

Passed Legislature

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

Sponsor: Choi
Last action: 2026-02-02
Official status: Returned to Secretary of Senate pursuant to Joint Rule 56.
Effective date: Not listed

Plain English Breakdown

The official summary does not provide specific goals and objectives of the tax expenditure.

Annual Tax Reduction for Partnerships and LLCs

The bill reduces the annual tax on limited partnerships, limited liability partnerships, and limited liability companies from $800 to $600 starting in 2026.

What This Bill Does

Reduces the annual tax on certain business types from $800 to $600 for five years.
Applies to taxable years beginning on or after January 1, 2026, and before January 1, 2031.

Who It Names or Affects

Limited partnerships
Limited liability partnerships
Limited liability companies

Terms To Know

tax expenditure: A reduction in government revenue caused by a tax exemption, deduction, credit, or other provision.

Limits and Unknowns

The bill does not specify what happens after the five-year period ends.
It is unclear how this change will affect state revenues during the specified time frame.

Bill History

2026-02-02 California Legislative Information
Returned to Secretary of Senate pursuant to Joint Rule 56.
2026-01-22 California Legislative Information
January 22 hearing: Held in committee and under submission.
2026-01-21 California Legislative Information
Set for hearing January 22.
2026-01-20 California Legislative Information
January 20 hearing: Placed on APPR. suspense file.
2026-01-15 California Legislative Information
Set for hearing January 20.
2026-01-15 California Legislative Information
Read second time and amended. Re-referred to Com. on APPR.
2026-01-14 California Legislative Information
From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 5. Noes 0. Page 3225.) (January 14).
2026-01-05 California Legislative Information
From committee with author's amendments. Read second time and amended. Re-referred to Com. on REV. & TAX.
2025-12-23 California Legislative Information
Set for hearing January 14.
2025-05-07 California Legislative Information
From committee with author's amendments. Read second time and amended. Re-referred to Com. on REV. & TAX.
2025-05-07 California Legislative Information
May 14 set for first hearing canceled at the request of author.
2025-04-04 California Legislative Information
Set for hearing May 14.
2025-04-02 California Legislative Information
Re-referred to Com. on REV. & TAX.
2025-03-26 California Legislative Information
From committee with author's amendments. Read second time and amended. Re-referred to Com. on RLS.
2025-02-19 California Legislative Information
Referred to Com. on RLS.
2025-02-13 California Legislative Information
From printer. May be acted upon on or after March 15.
2025-02-12 California Legislative Information
Introduced. Read first time. To Com. on RLS. for assignment. To print.

Official Summary Text

SB 347, as amended, Choi.
Annual tax: partnerships and LLCs.
Existing law imposes an annual minimum franchise tax of $800, except as provided, on every corporation incorporated in this state, qualified to transact intrastate business in this state, or doing business in this state, and an annual tax in an amount equal to the minimum franchise tax on every limited partnership, limited liability partnership, and limited liability company doing business in this state, as specified.
This bill, for taxable years beginning on or after January 1, 2026, and before January 1, 2031, would reduce the annual tax on every limited partnership, limited liability partnership, and limited liability company to
$200.
$600.
Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill also would include additional information required for any bill authorizing a new tax expenditure.
This bill would take effect immediately as a tax levy.

Current Bill Text

Read the full stored bill text

Download Bill PDF