All entities with a presence in the state of California are required to pay a minimum $800 fee.
To qualify for the tax you must have a "presence" in the state of California. A presence is defined by having an office or physical location, inventories, or employees in the state. If you aren't sure if you qualify, see Doing Business Rules in California from the state tax board.
Please be aware that this filing entails an $800 advance payment to the state of California to cover the cost of business for the current year.
Unless this is your business's first year, your CA Franchise Tax form is due to the CA Franchise Tax Board by April 15th. If the due date falls on a Saturday, Sunday, or legal holiday, file by the next regular workday.
The first year’s franchise tax fee is due no later than the 15th day of the 4th month after the business entity was formed. So, if you formed an LLC on June 1st, the first annual fee would be due on October 15th, and the second year’s fee would be due on April 15th of the following year.
- California-registered corporate entities are exempt from this tax during their first year.
- Out of state-registered companies are required to file even during their first year.
- Entities are required to pay this fee regardless of profitability (or lack thereof).
- Your filing deadline can be extended to the 15th day of the 10th month, but note that an automatic extension does not extend the time for payment of tax. The full amount of tax must be paid by the original due date.
Our comments may not contain a full description of all the facts or a complete exposition and analysis of all relevant authorities. Furthermore, the use of certain words such as “should, would, or will” is merely for grammatical convenience, is not intended to indicate a specific level of authority regarding a particular issue, and no explicit or implicit references should be taken there from. Our comments expressed herein are based upon the provisions of the Internal Revenue Code and Regulations in force on the date hereof, all proposed amendments to these Acts, Regulations and treaties publicly announced by the relevant authorities. Each and all of these authorities are subject to change at any time. Any such change could be given retroactive effect with respect to the transactions described herein and could cause the conclusions provided to become invalid, in whole or in part, with respect to any entity involved. There can be no assurance that these authorities will not disagree with, or challenge, the views set forth in this memorandum or that any such challenge will be unsuccessful.