As part of the California budget deal, the Legislature has sent AB 85 to the Governor (and he is expected to sign). The bill includes the following major tax changes:
- Suspending net operating losses for the 2020–2022 tax years for businesses with business income, or modified AGI, of $1 million or more;
- Limiting business credits to $5 million during the 2020–2022 taxable years; and
- Enacting a new first-year exemption from the $800 annual tax for limited partnerships, limited liability partnerships, and limited liability companies that organize or register with the Secretary of State’s office during 2021 through 2023.
Notably absent from the bill are any conformity provisions to the CARES Act or Families First Coronavirus Response Act.
We will provide additional information on these provisions in the next issue of Spidell’s California Taxletter.®
The text of the bill can be found at: