California Business Portal

What is the deployed military exception?

For tax years that begin on or after January 1, 2010, and before January 1, 2018, a limited liability company (LLC) that is a small business solely owned by a deployed member of the United States Armed Forces shall not be subject to the annual tax if both of the following apply:
  • The owner is deployed during the tax year.
  • The LLC operates at a loss or ceases operation.

For the purpose of this exception:
  • "Deployed" means called to active duty or active service during a period when the United States is engaged in combat or homeland defense."Deployed" does not include temporary duty for the sole purpose of training, processing, or a permanent change of station.
  • "Operates at a loss" means an LLC's expenses exceed its receipts.
  • "Small business" means an LLC with $250,000 or less of total income from all sources derived from, or attributable to, California.

Did you find this article helpful?

Haven't found what you're looking for, send us an email