A bipartisan commission appointed by Governor Schwarzenegger has recently proposed sweeping overhauls of California's tax laws, including reduction of personal income tax rates, the elimination of the corporate tax, and the elimination of the $800 per yaer minimum annual franchise tax levied on corporations, LLCs, and LLPs doing business in the state. The committee did, however, propose a 4% business net profits tax, exempting small businesses with less than $500,000 in revenues.
The recommendations are only that, and must be acted upon by the legislature and governor in order to become law.
For more information see:
Commission on the 21st Centuray Economy Press Release dated September 29, 2009