Tuesday, November 16, 2010

California Assemblyman Paul Cook (R-Yucca Valley) AB 2671 - AKA "Major Johnson's Law"

I got a law put in place to prevent other California residents who are serving their country from going through what I went through.  It's too bad this is not retroactive.  A special thanks to Assemblyman Paul Cook for his support of CA Veterans.  If you have questions or comments on issues that could help California Veteran Small Business Owners who are actively serving their country, please comment here or send email to LTC Elton Johnson, Jr. 

California Legislature
Assemblyman, 65th District

CONTACT: Sam Cannon
September 29, 2010
(916) 319-2065 

Assemblyman Cook's Bill to Cut Business Tax for Troops Signed into Law
SACRAMENTO - Assemblyman Paul Cook (R-Yucca Valley) is pleased to announce that with the signing of AB 2671, small businesses owned by deployed military members, which are unprofitable or defunct, will no longer have to pay the $800 minimum franchise tax. This unfair tax was levied on our deployed service members and their families who could not operate their businesses because they are serving our country.

Under current law, a deployed service member's company or corporation owes an $800 minimum franchise tax to the state annually regardless of whether or not it operates in the red or ceases to operate altogether. In many cases, these companies fail due to the fact that the owners have been called for deployments and are unable to oversee their operations.

California is one of six states in the U.S. that applies a minimum franchise tax, or tax equal to it, to businesses in their state. California though has one of the highest minimum taxes paid to the state no matter the circumstances. The California tax has risen over the years from a low of $100 to the current $800.

The purpose of AB 2671 is to relieve deployed service members who operate unprofitable or failing businesses of a tax burden, when the business' struggles are the result of the deployment. Prior to AB 2671, in a worse case scenario, if a service member was
killed while deployed and his business failed, California still burdened the family with an $800 tax while they were grieving.

"This tax was an insult to our military. California is burdensome enough for any business let alone one that is owned by deployed military personnel. I'd prefer that we eliminate the franchise tax altogether, but this bill is a good step in the right direction."

AB 2671 will take effect immediately and sunset in 2017.

Assemblyman Paul Cook represents the Inland Empire, including
portions of Riverside and San Bernardino Counties.