Tax Glossary

Income tax rate to which the taxpayer's highest dollar of income is subject.

Full, fair market value of an asset. Equals "full cash value" for Proposition 13 purposes in the property's "base year".

Feature of the federal income tax structure that cause the combined tax on two single people with equal incomes to be less than the tax on a married couple composed of the same two people. The California personal income tax does not impose a marriage penalty.

Manufacturer's Investment Credit

Minimum amount of tax imposed annually on any corporation under the California bank and corporation franchise tax. The minimum franchise tax is currently $800. There is no minimum franchise tax imposed on corporations their first year of incorporation. Limited partnerships and limited liability companies also pay an annual tax in an amount equal to the minimum franchise tax. However, limited partnerships, and limited liability companies are not included in the "new corporation" exemption.