Revenue and Taxation Code section 23696
(a)
Notwithstanding anything to the contrary in Section 23685 and 23695, a credit, or any portion thereof, allowed under Section 23685 or 23695 and generated by a disregarded single member limited liability company shall not be ineligible for assignment to a corporation that, directly or indirectly, owns the disregarded single member limited liability company, or to an affiliated corporation of that corporation, based on either of the following.(1)
The disregarded single member limited liability company is not considered a qualified taxpayer, as defined in subdivision (b) of Section 23685 and 23695.(2)
The amount of credit allowed under Section 23685 and 23695 does not exceed the tax liability of the disregarded single member limited liability company for purposes of paragraph (1) of subdivision (c) of Section 23685 or Section 23695.(b)
For purposes of this section, “affiliated corporation” has the same meaning as defined in paragraph (1) of subdivision (c) of Section 23685 and 23695.(c)
This section shall apply only when the credits affected by this section were assigned and claimed on a tax return timely filed with the Franchise Tax Board on or before January 1, 2025.
Source:
Section 23696, https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=RTC§ionNum=23696. (updated Jul. 3, 2025; accessed Jul. 14, 2025).
