The new state budget has a few disturbing things in it. It also does not fix the spending problems of the State so we will revisit this same issue next year.
Two items I spot right away is the State suspending the ability to carry a loss forward over the next two years and the acceleration of LLC minimum payments (the $800/yr tax) to be due on June 15 of the year rather than after the tax year is over.
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Limited Liability Companies (LLC) Payment Date Change:
Under prior law, LLC’s
were not required to pay the LLC fee until after the end of the year. This law change will
require an estimated payment of the fee amount on the 15th day of the sixth month of the
LLC year, generally June 15. This law change is expected to accelerate $360 million in
2008‑09 and $36 million in 2009‑10.
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Net Operating Loss (NOL) Suspension and Carryback:
Except for taxpayers with
income that is less than or equal to $500,000, NOL deductions are suspended for
tax years 2008 and 2009. Also, beginning in 2008, the time limit on carrying forward
NOLs is increased from 10 to 20 years. Beginning in 2011, taxpayers will be permitted
to carryback losses for two years, bringing California into conformity with federal law.
Carrybacks will be limited to 50 percent of losses for tax year 2011, and 75 percent for
tax year 2012. The full NOL could be carried back starting in 2013. This tax law change is
expected to increase revenues by $1.265 billion in 2008‑09 and $695 million in 2009‑10.
In part because of carrybacks, this tax law change is expected to reduce revenues in
subsequent years. The revenue loss is projected to be $265 million in 2010‑11 and
$485 million in 2011‑12.
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California Business Alert! New State Budget is not friendly to us! 
