California LLC $800 Franchise Tax Guide 2026: Exemptions & Deadlines

California LLC Tax — At a Glance

Minimum Annual Tax	$800/year
First-Year Exemption	Yes — for LLCs formed Jan 1, 2021 or later
Due Date (New LLC)	15th day of 4th month after formation
Due Date (Ongoing)	April 15 each year
Tax Form	FTB 3522 (Annual Tax) + FTB 3536 (Estimated Fee)
Late Penalty	5% of unpaid tax + 0.5%/month interest
State Biennial Report	$20/every 2 years (Statement of Information)
5-Year Total (min.)	~$4,070 (filing + $800 × 4 yrs + $20 biennial + RA)

California LLC Gross Receipts Fee

In addition to the $800 minimum, LLCs with California gross receipts above $250,000 pay an additional fee:

California Gross Receipts	Additional Annual Fee	Total Annual LLC Cost
Less than $250,000	$0	$800
$250,000 – $499,999	$900	$1,700
$500,000 – $999,999	$2,500	$3,300
$1,000,000 – $4,999,999	$6,000	$6,800
$5,000,000 and above	$11,790	$12,590

LLC vs. S-Corp: Does Converting Save the $800 Tax?

Many California business owners consider electing S-Corp status to reduce self-employment taxes. However, an S-Corp elected LLC still pays the $800 minimum franchise tax in California. The tax is levied on the entity's right to operate in California, not on its tax classification.

The S-Corp election can still be worth it for reducing self-employment taxes on owner salaries — but don't expect it to eliminate the $800 franchise tax.

Can I Avoid the $800 Tax by Forming in Another State?

No. If you operate your business in California — meaning you work there, have clients there, or have any physical presence — California's Franchise Tax Board will consider your LLC to be "doing business" in California and require you to register and pay the $800/year.

Forming in Wyoming or Delaware and claiming you're not "doing business" in California is a compliance risk that can result in back taxes, penalties, and loss of the LLC's legal protections.

The First-Year Exemption (2021 and Later)

LLCs, LPs, and LLPs formed on or after January 1, 2021 are exempt from the $800 minimum tax for their first taxable year. You still owe the tax from Year 2 onward, and you must still file Form 3522 in subsequent years.

Important: the exemption applies to the first taxable year, not the first 12 months. If you form your LLC in October 2026, Year 1 ends December 31, 2026 — so Year 2 (and the first $800 payment) begins January 1, 2027.

California LLC Tax FAQ

Does every California LLC pay $800 per year?

Yes — every California LLC pays a minimum $800/year franchise tax regardless of revenue, profit, or activity. The only exception is the first taxable year for LLCs formed on or after January 1, 2021.

When is the California LLC $800 tax due?

For a new LLC, the $800 is due by the 15th day of the 4th month after formation. For existing LLCs, it's due April 15 each year. Late payment triggers a 5% penalty plus interest.

Is the first-year California franchise tax waived?

Yes — for LLCs formed on or after January 1, 2021, the $800 franchise tax is waived for the first taxable year only. You still owe it from year two onward.

What are California LLC gross receipts fees?

In addition to the $800 base tax, California charges an additional fee based on LLC gross receipts: $900 for $250K–$499K; $2,500 for $500K–$999K; $6,000 for $1M–$4.9M; and $11,790 for $5M+.