Chapter 10.5 - Tax on Limited Partnerships - California Revenue and Taxation Code

Sections (3)

Amended by Stats. 2020, Ch. 8, Sec. 9. (AB 85) Effective June 29, 2020.

(a)Except as provided in subdivision (f), for each taxable year beginning on or after January 1, 1997, every limited partnership doing business in this state (as defined by Section 23101) and required to file a return under Section 18633 shall pay annually to this state a tax for the privilege of doing business in this state in an amount equal to the applicable amount specified in Section 23153.

(b)(1) In addition to any limited partnership that is doing business in this state and therefore is subject to the

tax imposed by subdivision (a), for each taxable year beginning on or after January 1, 1997, every limited partnership that has executed, acknowledged, and filed a certificate of limited partnership with the Secretary of State pursuant to Section 15621 or 15902.01 of the Corporations Code, and every foreign limited partnership that has registered with the Secretary of State pursuant to Section 15692 or 15909.01 of the Corporations Code, shall pay annually the tax prescribed in subdivision (a). The tax shall be paid for each taxable year, or part thereof, until a certificate of cancellation is filed on behalf of the limited partnership with the office of the Secretary of State pursuant to Section 15623, 15696, 15902.03, or 15909.07 of the Corporations Code.

(2)If a taxpayer files a return with the Franchise Tax Board that is designated its final return, that board shall notify the taxpayer that the tax imposed by this chapter is due annually

until a certificate of cancellation is filed with the Secretary of State pursuant to Section 15623, 15696, 15902.03, or 15909.07 of the Corporations Code.

(c)The tax imposed by this chapter shall be due and payable on the date the return is required to be filed under former Section 18432 or 18633.

(d)For purposes of this section, “limited partnership” means any partnership formed by two or more persons under the laws of this state or any other jurisdiction and having one or more general partners and one or more limited partners.

(e)Notwithstanding subdivision (b), any limited partnership that ceased doing business prior to January 1, 1997, filed a final return with the Franchise Tax Board for a taxable year ending before January 1, 1997, and filed a certificate of dissolution with the Secretary of State pursuant

to Section 15623 of the Corporations Code prior to January 1, 1997, shall not be subject to the tax imposed by this chapter for any period following the date the certificate of dissolution was filed with the Secretary of State, but only if the limited partnership files a certificate of cancellation with the Secretary of State pursuant to Section 15623 of the Corporations Code. In the case where a notice of proposed deficiency assessment of tax or a notice of tax due (whichever is applicable) is mailed after January 1, 2001, the first sentence of this subdivision shall not apply unless the certificate of cancellation is filed with the Secretary of State not later than 60 days after the date of the mailing of the notice.

(f)(1) Every limited partnership doing business in this state as described in subdivision (a) that files a certificate of

limited partnership or registers with the Secretary of the State pursuant to subdivision (b) on or after January 1, 2021, and before January 1, 2024, shall not be subject to the tax imposed under this section for its first taxable year.

(2)This subdivision shall become operative only for a taxable year in which any budget measure appropriates one dollar ($1) or more to the Franchise Tax Board for the costs associated with administration of this subdivision.

§ 17936

Added by Stats. 1997, Ch. 604, Sec. 10. Effective October 3, 1997.

A limited partnership shall not be subject to the taxes imposed by this chapter if the limited partnership did no business in this state during the taxable year and the taxable year was 15 days or less.

§ 17937

Added by Stats. 2006, Ch. 773, Sec. 49. Effective September 29, 2006.

(a)A limited partnership shall not be subject to the taxes imposed by this chapter for a taxable year if the limited partnership does all of the following:

(1)Files with the Franchise Tax Board a timely final annual tax return for the preceding taxable year.

(2)Does not do business in this state after the end of the taxable year for which the final annual tax return was filed.

(3)Files a certificate of cancellation with the Secretary of State, pursuant to Section 15623 or 15696 of the Corporations Code, before the end of the 12-month period beginning with the date the final annual tax return was filed.

(b)For purposes of this section, a “final annual tax return” is a return described in Section 18633 that is filed on or before the due date of the return, as extended, that the taxpayer designates in the manner prescribed by the Franchise Tax Board as the taxpayer’s final annual return for purposes of the tax imposed under this chapter. For purposes of this chapter, a “final annual tax return” is a return filed pursuant to Section 18633 where the taxpayer is not required to file a subsequent return to reflect the imposition of tax under this chapter.