How much is the California LLC franchise tax?

The California LLC minimum franchise tax is $800 per year. This applies to all LLCs, regardless of income or activity. It's due on the 15th day of the 4th month after your LLC's tax year begins (April 15 for calendar-year LLCs).

Is there a first-year exemption for California LLCs?

Yes, California offers a first-year exemption from the $800 franchise tax for new LLCs. This exemption applies to the LLC's first taxable year only. Starting in the second year, the full $800 franchise tax applies even if the LLC has no income.

What is the California LLC fee?

The LLC fee is an additional fee for LLCs with California-source income over $250,000. It ranges from $900 (income $250K-$499K) to $11,790 (income $5M+). This is in addition to the $800 franchise tax, not instead of it.

Do I have to pay $800 if my California LLC makes no money?

Yes, the $800 minimum franchise tax applies regardless of income, profit, or business activity. Even dormant LLCs must pay this tax. The only exception is the first-year exemption for newly formed LLCs.

When is the Statement of Information due?

The initial Statement of Information is due within 90 days of forming your LLC. After that, it's due every two years during the applicable filing period (based on your filing month). The fee is $20.

Is California a good state to form an LLC?

California is expensive for LLCs due to the $800 annual franchise tax. If you're doing business in California, you need a California LLC or foreign registration. If your business is location-independent and you don't live in CA, other states like Wyoming or Delaware may be more cost-effective.

California LLC Taxes & Fees 2026: Complete Cost Guide

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 actually quite affordable. The ongoing costs are what make California expensive.

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 formation (exempt for new LLCs)
Subsequent years: April 15 (with your annual tax return)
Estimated payment: Required by April 15 for the current year

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 this deadline results in a $250 penalty.

First-Year Franchise Tax Exemption

California offers a first-year exemption from the $800 franchise tax for newly formed LLCs.

How the Exemption Works

New LLCs formed in California don't owe the $800 franchise tax in their first taxable year
The exemption applies only to the first taxable year
Starting in Year 2, the full $800 applies even if you formed late in Year 1

Important Limitations

The exemption does NOT apply to the LLC fee (income-based fee)
If you have CA-source income over $250,000 in Year 1, you still owe the LLC fee
The exemption does NOT apply to foreign LLCs registering in California
Year 2 franchise tax is due by April 15 of Year 2

Example Timeline

If you form your LLC on July 1, 2026:

2026 (Year 1): $0 franchise tax (first-year exemption)
2027 (Year 2): $800 franchise tax due by April 15, 2027
2028 and beyond: $800 franchise tax due annually

Total Annual Cost Scenarios

Scenario 1: New Small LLC (Under $250K Revenue)

Year	Costs
Year 1	$70 (formation) + $20 (SOI) = $90
Year 2	$800 (franchise tax)
Year 3	$800 (franchise tax) + $20 (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.

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