California LLC Taxes: the $800 Minimum Franchise Tax, the LLC Fee from $250,000 and When Each Is Due
California LLC Taxes: the $800 Minimum Franchise Tax, the LLC Fee from $250,000 and When Each Is Due
Are LLCs free in California? No. Every California LLC owes the state an $800 minimum franchise tax each year, even in a year with no income. Once the LLC's California income reaches $250,000, it also owes an LLC fee. Both charges are paid to the Franchise Tax Board (FTB), not the Secretary of State, and missing either one brings consequences. This guide explains both charges in the order you will face them, with the due dates and what happens when a deadline is missed.
Informational only: this guide is not legal or tax advice. Rules and fee amounts can change, so confirm the figures with the FTB before you file.
The two state charges every California LLC faces
Every California LLC deals with two separate state charges, and they work differently:
- The $800 annual minimum franchise tax. Every LLC owes it every year it exists, whether it earns money or not.
- The LLC fee. This applies only after California-source total income reaches $250,000. It is paid in tiers from $900 up to $11,790.
The Secretary of State also charges fees, such as the $70 articles filing and the $20 Statement of Information. Those are filing fees, not taxes, and they are covered later in this guide.
The $800 minimum franchise tax
Under Revenue and Taxation Code 17941, every LLC organized or registered in California owes an annual tax of $800. The same rule applies to limited partnerships (LPs) and limited liability partnerships (LLPs). You pay it to the FTB with voucher FTB 3522.
When the regular payment is due
After the first year, the $800 is due on the 15th day of the 4th month of each tax year. For a calendar-year LLC, that is April 15.
First-year tax: what changed
California once exempted new LLCs from the first-year $800. That exemption covered only LLCs that organized or registered with the Secretary of State from January 1, 2021 through December 31, 2023. An LLC whose first taxable year begins in 2024, 2025 or 2026 owes the full $800 in year one. Do not assume a new California LLC gets a free first year.
The 2026 state budget added Revenue and Taxation Code 17941(g)(2). For an LLC whose first taxable year begins in 2027, 2028 or 2029, the first-year tax is $400 instead of $800. The second year returns to $800. The FTB's LLC page may not yet reflect this change, so confirm the first-year amount with the Franchise Tax Board before relying on it.
For the first year, the $800 is due on the 15th day of the 4th month after the Secretary of State filing date. The FTB's own example is an LLC registered on June 18 whose first payment is due September 15. That count treats the month of filing as month one.
The late-year formation trap
An LLC formed in November or December has a short first taxable year, and that can squeeze two payments together. Suppose you register an LLC on December 10, 2026. Counting December as month one, the first $800 is due March 15, 2027. Your 2027 tax year then begins immediately, and that year's $800 is due April 15, 2027, only about four weeks later. You will owe two $800 payments within roughly one month. Plan for both before you file the articles.
When the $800 stops
The $800 keeps coming every year until you file a certificate of cancellation with the Secretary of State. That is true even if the LLC is inactive or has filed a final return (Revenue and Taxation Code 17941(b)). A missed year does not end the obligation.
There are two narrower exceptions. You can use the short-form cancellation (Form LLC-4/8) within one year of organizing. A single-member LLC that did no business in California and had a tax year of 15 days or fewer owes no tax. Confirm both exceptions with the FTB before relying on either.
The LLC fee: starts at $250,000 of California income
The annual LLC fee in California is calculated on income, not receipts. Under Revenue and Taxation Code 17942, the fee applies once total income from California sources reaches $250,000. The threshold is $250,000, not $50,000, and the fee is not a gross receipts tax.
What counts as income
The base is total income from all sources derived from or attributable to California. That means gross income plus cost of goods sold, assigned to California under the state's sales-assignment rules. Because of those rules, your California-source income may differ from your total company revenue, so run the numbers before assuming which tier applies.
| California-source total income | LLC fee |
|---|---|
| Less than $250,000 | $0 |
| $250,000 to $499,999 | $900 |
| $500,000 to $999,999 | $2,500 |
| $1,000,000 to $4,999,999 | $6,000 |
| $5,000,000 or more | $11,790 |
When the fee is paid
Estimate the fee and pay it by the 15th day of the 6th month of the tax year, using FTB 3536. For a calendar-year LLC, that is June 15. You then settle the final amount on Form 568, the LLC's annual California return.
Commonly controlled LLCs
If you own several LLCs under common control, the FTB can treat them together when it finds they were formed to reduce the fee. Do not split a single business into several LLCs expecting the lower tiers to apply separately.
Form 568 deadlines and late penalties
Form 568 due dates depend on how the LLC is taxed and who owns it. The table below shows dates for a calendar-year LLC.
| LLC type | Form 568 due date | Extended due date |
|---|---|---|
| LLC taxed as a partnership | March 15 | October 15 |
| Single-member LLC owned by a partnership | March 15 | October 15 |
| Single-member LLC owned by an S corporation | March 15 | September 15 |
| Single-member LLC owned by an individual | April 15 | October 15 |
Penalties add up quickly. An LLC taxed as a partnership that files Form 568 late owes $18 per member per month, for up to 12 months. Late payment of tax carries a penalty of 5% of the unpaid tax, plus 0.5% for each month the payment is late, up to 40 months.
Secretary of State filings: fees that are not taxes
The Statement of Information (Form LLC-12) is a Secretary of State filing, not a tax. It costs $20 and is due within 90 days of filing the articles, then every two years during the six-month window ending on the last day of the anniversary month. If it is missed, the FTB assesses a $250 penalty after the Secretary of State sends a notice. Articles of Organization (Form LLC-1) cost $70.
Corporations, sole proprietors and out-of-state LLCs
The rules differ for other entities. A newly incorporated or qualified corporation, and a new S corporation, owes no $800 in its first taxable year. A C corporation pays 8.84% of net income (10.84% for banks). An S corporation pays 1.5% of net income with an $800 minimum. A corporation's Statement of Information costs $25 every year, and its articles cost $100.
An LLC that elects to be taxed as a corporation is taxed under the corporate rules instead, so confirm the treatment with the FTB before you make that election. Sole proprietors pay no franchise tax.
Forming the LLC in Nevada or Delaware does not avoid the $800. An LLC that is registered in California owes the same tax regardless of where it was originally formed.
Official resources
- Franchise Tax Board: LLC tax, Form 568 and the LLC fee
- California Secretary of State, Business Programs Division: entity filings and the Statement of Information
- bizfile Online: online filing for LLCs and corporations
When to get professional help
This guide is informational, not legal or tax advice. If your LLC has multiple owners, several related entities, out-of-state income, or a planned tax election, consult a qualified California CPA or business attorney before you file. A professional can confirm the first-year amount, the income assignment for the LLC fee and your Form 568 filing requirements.