California taxes
California franchise & LLC annual tax
California LLCs generally owe an $800 annual tax, including their first year when formed now. The temporary first-year LLC exemption covered only tax years beginning in 2021–2023 and has expired. Newly incorporated corporations are generally not subject to the $800 minimum franchise tax in their first taxable year, although income-based tax can still apply.
Last reviewed: October 2026
The requirements
What to know before you file
LLC / $800 annual tax
An LLC organized or doing business in California generally owes $800 annually. For the first year, payment is due by the 15th day of the fourth month from the SOS filing date; subsequent payments are due by the 15th day of the fourth month of the taxable year.
Official source: https://www.ftb.ca.gov/file/business/types/limited-liability-company/index.htmlThe LLC first-year exemption has expired
The temporary exemption applied to tax years beginning on or after January 1, 2021 and before January 1, 2024. LLCs formed now generally owe the $800 tax in their first year.
Official source: https://www.ftb.ca.gov/file/business/types/limited-liability-company/index.htmlNew corporation / first taxable year
Newly incorporated or qualified corporations generally have an exception to the $800 minimum franchise tax in their first taxable year. They may still owe tax based on income.
Official source: https://www.ftb.ca.gov/file/business/types/corporations/index.htmlS corporation / 1.5% and $800 minimum
The general California S corporation rate is 1.5% of California-source income, with an $800 minimum. A newly formed or qualified S corporation’s initial first-taxable-year return generally has a minimum-tax exception; income tax still applies. Financial S corporations have a different rate.
Official source: https://www.ftb.ca.gov/file/business/types/corporations/s-corporations.htmlThe answers that matter
Frequently asked questions
No general first-year annual-tax exemption applies now. The temporary exemption was limited to tax years beginning in 2021–2023.
Official source: https://www.ftb.ca.gov/file/business/types/limited-liability-company/index.htmlNewly incorporated corporations are generally exempt from the minimum in their first taxable year, but may owe income-based tax. Check eligibility with FTB or a tax professional.
Official source: https://www.ftb.ca.gov/file/business/types/corporations/index.htmlNo. FTB taxes are separate from Secretary of State filing fees and our service fees.
Official source: https://www.ftb.ca.gov/file/business/types/limited-liability-company/index.htmlYour next chapter. In California.
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