Inside BItcoins has a comprehensive overview of California bill AB-1326 – legislation that significantly restricts small Bitcoin businesses in the state. The article explains that the bill "… broadly defines a 'virtual currency business' as any activity involving the storage of digital currency on behalf of others; the exchange of fiat money for digital currency and vice versa; and even the exchange of one type of digital currency for another. It applies to all businesses and organizations who perform these activities in relation to a California resident." And sadly one of the harshest requirements from where I sit is the "non-refundable $5,000 application fee to the department of business oversight (DBO)."
Ugh.
If you're in California, contact your Assembly Member today!