California Code of Regulations › Title 18 - Public Revenues › Division 3 - Franchise Tax Board › Chapter 3.5 - Bank and Corporation Tax › Subchapter 2 - The Bank and Corporation Franchise Tax › Article 6 - Corporations Resuming Business › Section 23281 - Corporations Resuming Business

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
A corporation which ceases to do business during any
						taxable year and does not dissolve or withdraw during that year, but remains
						inactive during that year and one or more succeeding taxable years, shall, upon
						the resumption of business, pay a tax for the year it resumes business at the
						tax rate applicable for the year that business is resumed measured by the
						income of the year in which it discontinued doing business.
EXAMPLE (1):
The A Corporation, not a financial corporation, and
						reporting on a calendar year basis, ceased to do business on June 30, 19X1,
						after several years of normal operations. During the first six months of 19X1,
						A had a net income of $10,000. A resumes business on January 1, 19X3, on a
						calendar year basis. A must pay a tax equal to one-half the tax measured by its
						income in 19X1, on or before March 15, 19X3, and the balance on or before
						September 15, 19X3.
EXAMPLE (2):
The A Corporation, not a financial corporation, and
						reporting on a calendar year basis, ceased doing business on June 30, 19X1,
						after several years of normal operations. During the first six months of 19X1,
						A had a net income of $10,000. A resumes business on April 15, 19X3, on a
						calendar year basis. A must pay a tax equal to one-half the tax measured by its
						income in 19X1, on April 15, 19X3, and the balance on or before October 15,
						19X3.
Note: If A resumed business on August 1, 1961, the first
						installment would be payable on that date and the balance on or before December
						31, 19X3.
This rule does not apply to commencing corporations which
						have paid the tax for the year in which the corporation goes inactive; in such
						event the corporation shall pay a tax for the year it resumes business measured
						by the income of the year of resumption of business. Nor does it apply to
						corporations which were taxable under Chapter 3 after they cease to do business
						in this State; see Section
						23224.
Corporations which have undergone suspension or
						forfeiture under Section
						23301, and revive in a subsequent
						taxable year without having done business during the period of suspension or
						forfeiture are subject to the commencing corporation provisions of Article 4.
						Payment of the minimum tax is a condition precedent to the issuance of the
						certificate of revivor.
1. New
						Regs. 23281-23282 filed 12-14-64; effective thirtieth day thereafter (Register
						64, No. 25).
2. Renumbering and amendment of Section
						23281-23282 to Section
						23281 filed 9-3-82; effective
						thirtieth day thereafter (Register 82, No. 37).
Note: Authority cited: Section
						  26422,
						  Revenue and Taxation Code. Reference: Section
						  23281,
						  Revenue and Taxation Code.