California has multiple taxes that resemble franchise taxes. All of the California tax filings listed below are separate from the California statement of information, which is a Secretary of State filing requirement for LLCs, LPs, LLPs and Corporations that do business in California.
The taxes described here are administered by the Franchise Tax Board (FTB).
California's franchise tax is unique because it is a component of its corporate income tax filing. It acts as a kind of minimum tax for companies that do business in California.
Every corporation that is incorporated, registered, or doing business in California must pay the greater of its calculated franchise/income tax or the $800 minimum franchise tax, unless:
Additionally, newly formed or qualified corporations may be exempt from the $800 minimum in their first taxable year, though they must still pay tax on any income earned. Check FTB's corporation guidance for current first-year exemption rules.
Because the franchise tax is a minimum tax as part of the corporate income tax filing, it shares the same due date:
Extensions are available under FTB rules.
LLCs, on the other hand, don’t pay a “franchise tax”, but every LLC that is doing business or organized in California must pay an annual tax of $800.
The annual tax payment is due with the LLC Tax Voucher (FTB 3522).
You have until the 15th day of the 4th month from the date you file with the Secretary of State to pay your first-year annual tax.
Subsequent annual tax payments are due on the 15th day of the 4th month of your taxable year.
Note: Past legislation provided temporary first-year exemptions for certain newly formed LLCs during specific effective-date windows. Check FTB's LLC page to confirm whether any first-year exemptions are currently in effect.
Additionally, if an LLC has more than $250,000 in California income, there is an additional fee owed based on the amount made. LLCs must estimate and pay the fee by the 15th day of the 6th month of the current tax year.
Use Estimated Fee for LLCs (FTB 3536) to remit the estimated fee payment. Late payments are subject to penalties and interest.
Both the LLC Annual Tax and the LLC Fee are in addition to state income taxes, the Limited Liability Company Return of Income (Form 568).
LPs and LLPs are generally subject to an $800 annual partnership tax when classified as partnerships for tax purposes. This tax is reported on Form 565 (Partnership Return of Income).
California's multiple tax obligations create ongoing compliance requirements that multiply when managing entities across multiple states.
While Discern does not file California FTB taxes directly (taxpayers remain responsible for filing via FTB-approved channels), Discern can file your California Statement of Information, notify you when taxes are due, and provide guidance and tracking to help you stay compliant.
Ready to simplify your ongoing compliance? Try Discern today.
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