California Franchise Tax & LLC Fee Calculator

Under California Revenue and Taxation Code § 23153 (for corporations) and § 17941 (for LLCs), entities doing business in the state are subject to an annual minimum franchise tax of $800.00. This tax is for the privilege of exercising corporate powers within California and is payable to the Franchise Tax Board (FTB) regardless of revenue or operating losses. Corporations that incorporate or qualify in California skip the minimum in their first taxable year under § 23153(f); LLCs formed in 2024 or later have no such exemption.

California Assembly Bill 85 (codified for LLCs in Cal. Rev. & Tax Code § 17941(g)) waived the first-year $800 annual tax for LLCs, LPs and LLPs formed or registered between January 1, 2021 and December 31, 2023. The Legislature did not extend it, so those entities formed in 2024 or later owe the $800 in their first taxable year. Corporations were never part of AB 85: they have a separate, permanent first-year exemption from the minimum tax under § 23153(f), but still owe 8.84% (C-corp) or 1.5% (S-corp) on any net income that year.

Under Cal. Rev. & Tax Code § 17942, in addition to the $800 annual tax, LLCs must pay an annual fee based on total California gross receipts: $0 under $250k; $900 for $250k–$499k; $2,500 for $500k–$999k; $6,000 for $1M–$4.99M; and $11,790 for $5M or more. This fee must be estimated and paid by the 15th day of the 6th month (June 15 for calendar filers) using Form 3536.

Calendar-year LLCs pay the $800 annual tax by the 15th day of the 4th month (April 15) with voucher FTB 3522 or FTB Web Pay. If total California income will reach $250,000, estimate and pay the LLC fee by the 15th day of the 6th month (June 15) with Form 3536. The Form 568 return is due March 15 for multi-member LLCs and April 15 for single-member LLCs, extendable to October 15, but extensions cover filing only, not payment.

Under Cal. Rev. & Tax Code § 17942(d), underpaying the June 15 Form 3536 estimate costs 10% of the shortfall. The safe harbor: if your June 15 payment equals at least 100% of the fee you owed last year, no penalty applies. Pay the balance with the return. If projected income stays under $250,000, skip Form 3536 entirely.

R&TC § 19132 adds 5% of unpaid tax plus 0.5% per month (up to 40 months) for late payment. R&TC § 19172 charges multi-member LLCs $18 per member per month (up to 12 months) for a late Form 568. A missing Statement of Information draws a $250 SOS penalty. Ignoring an FTB demand adds a 25% penalty and can suspend the entity — a suspended LLC cannot sue, defend, or enforce contracts.

The Statement of Information goes to the California Secretary of State, not the FTB, and keeps your registered agent, addresses, and managers current. File Form LLC-12 within 90 days of formation and then every two years inside the six-month window ending with your anniversary month, at bizfileonline.sos.ca.gov. Missing it triggers a $250 penalty and eventual suspension.

Under Cal. Rev. & Tax Code § 17946, an LLC whose first taxable year is 15 days or less and that conducts no business during that window owes nothing for that short year. For calendar-year LLCs this effectively means forming on or after December 17 and waiting until January to operate. Related relief: short-form cancellation (SOS LLC-4/8) within 12 months with no business and no debts can avoid the first-year $800 entirely.

The $800 accrues every year until the Secretary of State cancels the LLC — going dormant just stacks tax, penalties, and interest. The clean exit: (1) file a final Form 568, check Final Return, and pay the last year's $800 plus any fee; (2) stop doing business in California after that year ends; (3) file a Certificate of Cancellation (LLC-4/7, plus LLC-3 dissolution unless all members voted) within 12 months of the final return. The FTB does not refund earlier years.