California LLC Costs 2026: $70 to Form + $800/yr Franchise Tax
Quick Answer
California LLCs pay an $800 minimum annual franchise tax regardless of income — one of the highest in the country. The formation fee is $70 and the biennial Statement of Information is $20. LLCs with California-source income over $250,000 owe an additional LLC fee of $900 to $11,790. There is no longer a first-year waiver: the AB 85 first-year $800 exemption applied only to LLCs registered between January 1, 2021 and December 31, 2023, so an LLC formed in 2026 owes the $800 in its first taxable year.
Key Takeaways
- $800 minimum franchise tax every year, including the first taxable year (the AB 85 first-year waiver expired after 2023)
- $70 formation fee (Articles of Organization, Form LLC-1)
- $20 biennial Statement of Information (Form LLC-12, every 2 years)
- Additional LLC fee if CA-source income exceeds $250,000 ($900-$11,790)
- Statement of Information due within 90 days of formation
- California is one of the most expensive states for LLC maintenance
| Item | Cost/Details | Notes |
|---|---|---|
| Articles of Organization | $70 | One-time formation fee |
| Annual Franchise Tax | $800 | Minimum, due every year |
| Statement of Information | $20 | Every 2 years |
| LLC Fee ($250K-$499K income) | $900 | In addition to franchise tax |
| LLC Fee ($500K-$999K income) | $2,500 | In addition to franchise tax |
| LLC Fee ($1M-$4.99M income) | $6,000 | In addition to franchise tax |
| LLC Fee ($5M+ income) | $11,790 | Maximum additional fee |
LLC Formation Costs
Forming an LLC in California is cheap — the cost is in keeping it alive. The one-time filing fee is $70, but every year after that you owe the state's $800 minimum franchise tax. For a full picture of every California deadline, see our California LLC compliance hub.
Articles of Organization Filing
- Filing fee: $70
- Processing time: 3-5 business days (online)
- Filing method: Online through bizfile.sos.ca.gov
- Expedited options: Available for additional fees
Optional Services
| Service | Fee |
|---|---|
| Name Reservation | $10 |
| Certified Copy | $5 |
| Certificate of Good Standing | $5 |
| Same-Day Processing | $350 |
The $800 Franchise Tax
California's $800 minimum franchise tax is the most significant ongoing cost for California LLCs. It's one of the highest minimum taxes in the country.
Key Facts About the $800 Tax:
- Due every year, regardless of income or profit
- Applies even if your LLC makes $0
- Applies even to dormant or inactive LLCs
- Must be paid for partial years (prorated in some cases)
When the Franchise Tax Is Due
For calendar-year LLCs (most common), the franchise tax is due:
- First year: By the 15th day of the 4th month after the LLC is formed (the $800 is owed — there is no first-year waiver for LLCs formed after 2023)
- Subsequent years: April 15 for calendar-year LLCs (15th day of the 4th month of the tax year)
- How to pay: File Form 3522 (LLC Tax Voucher) with the payment
Payment Methods
- Pay online through the California Franchise Tax Board (FTB) website
- Pay by check with Form 3522 (LLC Tax Voucher)
- Use Form 3536 for estimated fee payments
What If My LLC Has No Income?
No Exemption for Zero Income: Unlike some states, California's $800 franchise tax applies regardless of income. If your LLC is inactive or makes no money, you still owe $800 per year. To stop the tax, you must formally dissolve or cancel your LLC with the Secretary of State.
Additional LLC Fee (High-Income LLCs)
If your LLC has California-source income over $250,000, you must pay an additional LLC fee on top of the $800 franchise tax.
LLC Fee Schedule
| California-Source Income | LLC Fee | Total with Franchise Tax |
|---|---|---|
| Less than $250,000 | $0 | $800 |
| $250,000 - $499,999 | $900 | $1,700 |
| $500,000 - $999,999 | $2,500 | $3,300 |
| $1,000,000 - $4,999,999 | $6,000 | $6,800 |
| $5,000,000 or more | $11,790 | $12,590 |
What Counts as California-Source Income
The LLC fee is based on "total income from all sources derived from or attributable to California." This includes:
- Income from sales to California customers
- Income from services performed in California
- Rental income from California property
- Income apportioned to California (for multi-state businesses)
Estimated Fee Payment
If you expect to owe the LLC fee, you must make an estimated payment by the 15th day of the 6th month of your taxable year (June 15 for calendar-year LLCs).
Statement of Information
California LLCs must file a Statement of Information (Form LLC-12) with the Secretary of State:
Filing Requirements
- Initial filing: Within 90 days of formation
- Subsequent filings: Every two years during the applicable filing period
- Filing fee: $20
- Late penalty: $250 for late filing
Information Required
- LLC name and California file number
- Business addresses (principal office and mailing)
- Agent for service of process information
- Manager or member information (depending on management structure)
- Type of business
Don't Miss the 90-Day Deadline: The initial Statement of Information must be filed within 90 days of formation. Missing it triggers a $250 penalty. For the full filing-window mechanics and how the $250 penalty stacks with FTB suspension, see our deep dive on the California Statement of Information and $800 franchise tax trap.
California Income Tax on LLC Profits
The $800 franchise tax and the LLC fee are separate from income tax. A standard California LLC is pass-through: its profits are taxed on the owners' personal returns, not at the entity level. California's personal income tax is progressive, running from 1% up to a top marginal rate of 12.3%, plus an additional 1% Mental Health Services Tax on taxable income over $1 million (a 13.3% top effective rate).
- Default LLC (pass-through): Profits flow to members and are taxed at personal rates (up to 12.3%, or 13.3% over $1M).
- LLC taxed as a C corporation: Pays California's 8.84% corporate income tax instead of pass-through treatment.
- LLC taxed as an S corporation: Pays the 1.5% S corporation tax (minimum $800) at the entity level.
For most small LLCs the income-tax piece is paid through the owner's Form 540, while the LLC itself still files Form 568 and pays the $800 plus any LLC fee.
No First-Year Waiver After 2023
A lot of older guides still tell you California waives the $800 in your first year. That is out of date. The first-year exemption came from Assembly Bill 85 and applied only to LLCs that registered with the Secretary of State between January 1, 2021 and December 31, 2023. It was never extended.
If you form your LLC in 2026, you owe the $800 in year one. The payment is due by the 15th day of the 4th month after the LLC is formed. Budget for it from day one — missing it leads to penalties and possible FTB suspension.
Example Timeline (LLC formed July 1, 2026)
- 2026 (Year 1): $800 franchise tax due by October 15, 2026 (15th day of the 4th month after formation)
- 2027 (Year 2): $800 franchise tax due by April 15, 2027
- 2028 and beyond: $800 due every year until the LLC is formally cancelled
Note the $800 tax and the income-based LLC fee are separate obligations, and neither was covered by a 2026 waiver. For what happens when these payments slip, see California LLC late filing penalties.
Total Annual Cost Scenarios
Scenario 1: New Small LLC (Under $250K Revenue)
| Year | Costs |
|---|---|
| Year 1 | $70 (formation) + $800 (franchise tax) + $20 (initial SOI) = $890 |
| Year 2 | $800 (franchise tax) |
| Year 3 | $800 (franchise tax) + $20 (biennial SOI) = $820 |
Scenario 2: Established LLC ($500K Revenue)
| Year | Costs |
|---|---|
| Annual (odd years) | $800 (franchise) + $2,500 (LLC fee) + $20 (SOI) = $3,320 |
| Annual (even years) | $800 (franchise) + $2,500 (LLC fee) = $3,300 |
Comparison with Other States
| State | Minimum Annual Cost |
|---|---|
| California | $800+ |
| Ohio | $0 |
| Texas | $0 (under $2.47M revenue) |
| Indiana | $32 (biennial) |
| Wyoming | $60 |
Strategic Consideration: If you're starting a business and have flexibility on location, California's $800 annual minimum makes it one of the most expensive states for LLC maintenance. However, if you're physically located in California or doing significant business there, you'll likely need a California LLC or foreign registration regardless of cost.
Frequently Asked Questions
How much is the California LLC franchise tax?
Is there a first-year exemption from the $800 California LLC tax?
What is the California LLC fee?
Do I have to pay $800 if my California LLC makes no money?
When is the Statement of Information due?
Is California a good state to form an LLC?
Official Source
For the most up-to-date information, always verify requirements with the official California Secretary of State website:
https://www.sos.ca.gov/business-programsImportant Disclaimer
This article is for informational purposes only and does not constitute legal advice. LLC requirements, fees, and deadlines change frequently. Always verify current requirements with your state's Secretary of State office before making business decisions.
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California LLC Late Filing Penalties
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Complete California LLC Compliance Guide
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