Technically, STATE OF CALIFORNIA has a franchise tax on corporations, not a corporate tax on corporations

People mistakenly pay taxes to what is officially called the Franchise Tax Board of the STATE OF CALIFORNIA. As for corporations, the officers think they are paying a corporate income tax. Technically, they are paying a ‘franchise tax‘ that applies to all corporations.

So the people running a company incorporated to gain ‘legal’ protections, but mistakenly made themselves liable for the franchise tax.

Why is it called a franchise tax? Because most of these corporations are technically franchises of a corporation created by the federal government. They incorporated themselves into UNITED STATES Inc.. A franchise is part of the mother ship.

See how the website of Franchise Tax Board explains it:

Minimum franchise tax
Every corporation that is incorporated, registered, or doing business in California must pay the $800 minimum franchise tax.

Exceptions to the first year minimum tax
Newly incorporated or qualified corporations are not required to pay the minimum franchise tax in their first taxable year.

Corporations are also not subject to the minimum tax if both of the following are true:

    • They did not conduct any business in California during the tax year

    • Their tax year was 15 days or fewer

Does thou now see the Franchise Tax Board in a new light?

The other part of the scam is that supposedly the statutes and codes never define the borders of California. The statutes always say “in this state” and supposedly rarely say “in California”. This is because STATE OF CALIFORNIA is also a franchise of UNITED STATES, and all of these entities are just on paper. They are file folders. They cannot have borders because they are not defined geographically.

Even the UNITED STATES Title 26 implies that the term United States is not used geographically:

(9) United States: The term “United States” when used in a geographical sense includes only the States and the District of Columbia.

The catch is that for the Federal “income tax”, United States is not defined geographically! The deception is subtle. See “David Williams” interview, and search for the word ‘geographically’.

Although STATE OF CALIFORNIA explicitly named the tax agency as Franchise Tax Board, the other STATE OF corporations tell corporations they must pay a ‘franchise/excise’ tax.


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