Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2017
 

Revenue and Taxation Code

Division 2. Other Taxes

Part 11. Bank and Corporation Tax Law

Chapter 2. The Bank and Corporation Franchise Tax

Article 2. Tax on General Corporations*

Section 23151

23151. Tax rate. (a) With the exception of banks and financial corporations, every corporation doing business within the limits of this state and not expressly exempted from taxation by the provisions of the Constitution of this state or by this part, shall annually pay to the state, for the privilege of exercising its corporate franchises within this state, a tax according to or measured by its net income, to be computed at the rate of 7.6 percent upon the basis of its net income for the next preceding income year, or if greater, the minimum tax specified in Section 23153.

(b) For calendar or fiscal years ending after June 30, 1973, the rate of tax shall be 9 percent instead of 7.6 percent as provided by subdivision (a).

(c) For calendar or fiscal years ending in 1980 to 1986, inclusive, the rate of tax shall be 9.6 percent.

(d) For calendar or fiscal years ending in 1987 to 1996, inclusive, and for any income year beginning before January 1, 1997, the tax rate shall be 9.3 percent.

(e) For any income year beginning on or after January 1, 1997, the tax rate shall be 8.84 percent. The change in rate provided in this subdivision shall be made without proration otherwise required by Section 24251.

(f) (1) For the first taxable year beginning on or after January 1, 2000, the tax imposed under this section shall be the sum of both of the following:

(A) A tax according to or measured by net income, to be computed at the rate of 8.84 percent upon the basis of the net income for the next preceding income year, but not less than the minimum tax specified in Section 23153.

(B) A tax according to or measured by net income, to be computed at the rate of 8.84 percent upon the basis of the net income for the first taxable year beginning on or after January 1, 2000, but not less than the minimum tax specified in Section 23153.

(2) Except as provided in paragraph (1), for taxable years beginning on or after January 1, 2000, the tax imposed under this section shall be a tax according to or measured by net income, to be computed at the rate of 8.84 percent upon the basis of the net income for that taxable year, but not less than the minimum tax specified in Section 23153.

History.—Amended by Stats. 2000, Ch. 862, in effect January 1, 2001.

Valuation methodology.—Under the income method of assessing property subject to taxation (Property Tax Rule 8), the appropriate tax rate for the conversion from an after-tax to a before-tax discount rate is the typical potential purchaser's expected California marginal income tax rate under Revenue and Taxation Code Section 23151 combined with the federal marginal income tax rate. Incorrect methodology was used to assess the value of wind turbine generators and related equipment where the assessor used an average rate that included taxes paid to other states. Sky River LLC et al. v. County of Kern (2013) 214 Cal.App.4th 720.

* Article 2 was added by Stats. 1949, Ch. 557, in effect October 1, 1949.