Senator Anthony Cannella (R-Ceres) presented Senate Bill 1417 to members of the Senate Governance and Finance Committee, urging them to help improve California’s business-friendly image by reducing costs.
“SB 1417 provides much needed relief for small businesses in our state and modernizes our tax code to ensure that California is an ideal destination for small business,” said Cannella.
The current tax structure also discourages small business owners from forming C Corporations. This causes many to file Sole Proprietorships and operate without the protections offered by incorporation. When combined with recent federal tax legislation, this reality poses a very real threat to small businesses up and down the state, said Cannella.
SB 1417 replaces the state’s current “one size fits all” minimum franchise tax code with a progressive tax based on a corporation’s annual gross receipts. This change will assist new and struggling businesses and help business owners conform to changes in the federal tax code.
“I am encouraged by the support of this Committee and anticipate moving this measure forward for the benefit of the California’s business community,” he said.
The measure is supported by many pro-business groups, including the California Small Business Association, who sent their President to testify at the hearing. Other groups that testified or provided written support were National Federation of Independent Businesses, California Business Roundtable, and San Francisco Chamber of Commerce.
“California small businesses are thankful for the efforts of Senator Cannella to reduce the financial burden of operating in this state, which would ultimately increase jobs in our communities,” said Betty Jo Toccoli, president of the California Small Business Association.
SB 1417 unanimously passed the Senate Governance and Finance Committee on a 6-0 vote and now goes to the Senate Appropriations Committee for fiscal considerations.