California lesson 5 of 6
California LLC taxes: the $800 tax and the LLC fee
California's LLC tax picture confuses people because there are two separate state charges with different rules, on top of the federal treatment that applies everywhere.
The $800 annual tax
Every LLC doing business in California, or organised in California, owes an annual tax of $800 to the Franchise Tax Board. It is due even in a year with no revenue and no activity, and it keeps running until the LLC is formally cancelled. The first payment is due by the 15th day of the 4th month after you file with the Secretary of State, then annually.
The first year waiver that applied to LLCs registering between 2021 and 2023 has ended. Budget for the $800 in year one.
The LLC fee on California income
Separately, an LLC with total California income of $250,000 or more owes an additional fee. The Franchise Tax Board sets it in bands: $900 from $250,000, $2,500 from $500,000, $6,000 from $1,000,000 and $11,790 from $5,000,000. It is charged on income, not profit, so a low margin business can owe it in a year it makes no money.
The fee is estimated and paid by the 15th day of the 6th month of the current tax year, so it is due before you know the final figure.
Federal treatment and other registrations
Federally, a single member LLC is disregarded and a multi member LLC is taxed as a partnership unless you elect otherwise. S corporation status is a tax election, not a different California entity, and California charges a 1.5 percent franchise tax on LLCs and corporations that elect it. Weigh that before electing.
If you sell goods you will also need a seller's permit from the CDTFA, and if you hire staff you register with the Employment Development Department for payroll taxes.
Key takeaways
- $800 a year is unavoidable while the LLC exists, revenue or not.
- The LLC fee starts at $250,000 of California income and is based on income, not profit.
- Selling goods or hiring staff adds separate state registrations.
Frequently asked questions
Can I avoid the $800 by forming in Wyoming or Nevada?
No, if you are actually doing business in California. The Franchise Tax Board applies the $800 to out of state LLCs that do business here, and you would then be paying two states instead of one.
Is the $800 deductible?
It is generally a deductible business expense on the federal return. Confirm the treatment with your accountant for your particular facts.
Official sources
Or let us file your California LLC for you
Everything above is yours to use for free. If you would rather hand it over, we prepare and file the Articles of Organization (Form LLC-1), act as your registered agent, and track your ongoing deadlines.
Last reviewed: September 2026 - reviewed by Gullia Filing Legal & Formation Team