Every California LLC pays the state a flat $800 each year plus, at higher revenue levels, a graduated fee that can reach $11,790. That is the California LLC franchise tax, and it is owed to the Franchise Tax Board whether the business made money, lost money, or never opened its doors. The obligation starts the moment you file Articles of Organization (or register as a foreign LLC) and does not end until you formally cancel the entity with the Secretary of State.
The Flat $800 Annual Tax
Revenue and Taxation Code Section 17941 requires every LLC organized in California, registered with the Secretary of State, or “doing business” in the state to pay $800 per year.1State of California Franchise Tax Board. Limited Liability Company It applies whether your LLC is treated as a partnership or a disregarded entity for federal purposes, and it applies even with zero revenue.2California Franchise Tax Board. FTB Pub. 3556 – Limited Liability Company Filing Information It is not an income tax. It is a flat charge for the privilege of existing as a California LLC.
The “doing business” language matters because it reaches entities that never registered. Employees, customers, or property in California can be enough for the FTB to treat an out-of-state LLC as doing business here and demand the $800.
For a calendar-year LLC, the tax is due on the 15th day of the 4th month of the tax year, which is April 15 for most businesses. You pay it with Form FTB 3522, the LLC Tax Voucher.3State of California Franchise Tax Board. Due Dates Businesses A newly formed LLC owes its first $800 by the 15th day of the 4th month after filing with the Secretary of State.
One boundary worth flagging: the first-year exemption created by Assembly Bill 85 only covered LLCs organized or registered between January 1, 2021, and January 1, 2024.2California Franchise Tax Board. FTB Pub. 3556 – Limited Liability Company Filing Information That window has closed. LLCs formed on or after January 1, 2024, owe the full $800 in year one.
The Income-Based LLC Fee
On top of the $800, Revenue and Taxation Code Section 17942 imposes a separate fee once your LLC’s total income from California sources reaches $250,000 in a taxable year.4California Legislative Information. California Code RTC 17942 – Tax and Fees on Limited Liability Companies The tiers:
- $250,000 to $499,999: $900
- $500,000 to $999,999: $2,500
- $1,000,000 to $4,999,999: $6,000
- $5,000,000 or more: $11,790
An LLC pulling $5 million or more in California income pays $12,590 combined before any income tax.4California Legislative Information. California Code RTC 17942 – Tax and Fees on Limited Liability Companies
“Total Income” Is Not Profit
The definition catches people off guard. Under California regulations, “total income” for this fee means gross income plus cost of goods sold.5New York Codes, Rules and Regulations. California Code of Regulations 17942 – LLC Fees In practice that is essentially gross receipts. A business with $600,000 in sales and $200,000 in COGS has $400,000 of gross income but $600,000 of “total income” for fee purposes. That difference is enough to jump from the $900 tier to the $2,500 tier. Many owners underestimate the fee because they assume it tracks profit.
Estimated Payment by June 15
If you expect to owe the income-based fee, you must estimate and prepay it by the 15th day of the 6th month of the tax year, which is June 15 for calendar-year filers, using Form FTB 3536.1State of California Franchise Tax Board. Limited Liability Company The FTB lets you base the estimate on the prior year’s Schedule IW from Form 568.6Franchise Tax Board. 2025 Instructions for Form FTB 3536 Estimated Fee for LLCs The final number is reconciled on Form 568; if you underpaid the estimate, you make up the difference there.
The Deadlines That Actually Matter
For a calendar-year LLC:
- March 15: Form 568 due for LLCs classified as partnerships. Single-member LLCs owned by an individual file by April 15 instead.3State of California Franchise Tax Board. Due Dates Businesses
- April 15: $800 annual tax due on Form FTB 3522.3State of California Franchise Tax Board. Due Dates Businesses
- June 15: Estimated LLC fee due on Form FTB 3536 if total income will hit $250,000 or more.1State of California Franchise Tax Board. Limited Liability Company
Weekend and holiday due dates roll to the next business day. An extension is available for the return, pushing filing to October 15 for calendar-year filers, but it does not push back either payment deadline. The $800 tax and the estimated fee are still due on their original dates.
How to Pay
FTB Web Pay is the fastest route. You log in at the FTB site, choose the business payment option, enter your entity ID and bank details, and authorize the payment.7Franchise Tax Board. Pay by Bank Account (Web Pay) Save the confirmation number.
Watch the entity ID field. For an LLC it is the 9-digit or 12-digit number from the Secretary of State, not the 7-digit corporate number.8Franchise Tax Board. Entity ID Number to Use for Electronic Payment Methods If your LLC is not registered with the Secretary of State, use the FTB-issued ID instead.9Franchise Tax Board. Business Entity ID Number Help
To pay by mail, send the completed voucher (Form FTB 3522 or 3536) with a check to Franchise Tax Board, PO Box 942857, Sacramento, CA 94257-0531, and write your entity ID on the memo line.10Franchise Tax Board. 2025 Instructions for Form FTB 3522 LLC Tax Voucher Paper payments can take several weeks to post. If you already paid through Web Pay, do not also mail a voucher for the same payment.11California Franchise Tax Board. Web Pay Login for Business
Penalties and Interest for Paying Late
Miss the annual tax or fee deadline and the FTB assesses a 5% penalty on the unpaid amount right away, plus 0.5% per month the balance remains unpaid, capped at 40 months.12Franchise Tax Board. Common Penalties and Fees Interest also accrues. From July 2025 through June 2026, the underpayment interest rate is 7%.13Franchise Tax Board. Interest and Estimate Penalty Rates
Partnership-classified LLCs face a separate late-filing penalty on Form 568: $18 per member per month, up to 12 months.12Franchise Tax Board. Common Penalties and Fees A five-member LLC six months behind owes $540 in filing penalties alone, before anything is added for the underlying unpaid tax.
What Suspension Actually Does to Your Business
If the tax stays unpaid long enough, the FTB suspends the LLC. Under Revenue and Taxation Code Section 23301, the FTB can suspend a domestic LLC’s powers and privileges once the tax remains unpaid more than a year after the close of the taxable year.14California Legislative Information. California Code Revenue and Taxation Code RTC 23301
A suspended LLC cannot legally do business in California. It cannot sue or defend in court. It cannot sell or transfer real property. It cannot even dissolve until it clears the delinquency. Any contract it enters while suspended is voidable by the other side, so a customer, vendor, or landlord can walk away with no recourse for the LLC. The FTB may also add a $2,000 penalty per tax year if the LLC fails to file missing returns within 60 days of a written demand.15Franchise Tax Board. My Business Is Suspended
Revival requires filing all delinquent returns, paying every back tax, penalty, and interest charge, and then formally requesting revivor.
Stopping the Tax by Canceling the LLC
The $800 keeps accruing every year the LLC exists on the Secretary of State’s records, active or not. The only way to stop it is to cancel the LLC.1State of California Franchise Tax Board. Limited Liability Company
File a Certificate of Cancellation (Form LLC-4/7) with the Secretary of State. It includes a tax liability statement confirming that final returns have been or will be filed with the FTB.16California Secretary of State. Certificate of Dissolution / Certificate of Cancellation / Short Form Cancellation Certificate There is no filing fee. If all members voted to dissolve, you can note the unanimous vote on the cancellation form and skip a separate Certificate of Dissolution.
On the FTB side, file a final Form 568, check the “Final Return” box, and pay any remaining tax or fee for the final year. The $800 is still owed for the year of cancellation. An inactive LLC left on the books for three extra years piles up $2,400 in franchise tax for nothing. Cancel promptly and the meter stops.