California's $800 LLC franchise tax, explained

California’s $800 annual franchise tax is the most-asked LLC tax question in the country, and the answer people least want to hear: every LLC organized in, registered in, or doing business in California owes the Franchise Tax Board $800 a year under Revenue & Taxation Code §17941 — profitable or not, active or not, until the LLC is properly cancelled. And the single most expensive misunderstanding about it is the idea that a Wyoming or Nevada LLC escapes it. If the company is run from California, it doesn’t.

The $800 tax at a glance

Annual minimum tax

$800

every year, even at $0 income

Annual due date

April 15

calendar-year LLCs, Form 3522

Estimated LLC fee due

June 15

Form 3536, if income ≥ $250k

First-year tax 2027–29

$400

SB 122, first taxable year only

Two different charges hide behind the phrase “California LLC tax,” and mixing them up is the most common budgeting mistake. The $800 annual tax is flat and unconditional. The LLC fee is a second, tiered charge that only starts at $250,000 of California income. Below, each one in turn — then the forms, the first-year rules, and the out-of-state trap.

The $800 annual tax: who owes it and why

Under R&TC §17941, an LLC owes the $800 annual tax if any of these is true:

• It was organized in California — filing Articles of Organization is enough; an LLC organized here is doing business here by definition.
• It registered with the Secretary of State as a foreign (out-of-state) LLC.
• It is doing business in California under §23101 — even if it never registered at all.

The FTB is explicit that the tax is due “even if you are not conducting business, until you cancel your LLC.” There is no proration for a partial year, no dormancy discount, and no income floor. The only structural exceptions are the 15-day rule below and a narrow waiver for small businesses solely owned by deployed members of the U.S. Armed Forces. An LLC that elects to be taxed as a corporation exits this regime entirely — it pays the corporate minimum franchise tax under corporation rules and files Form 100 instead.

The first-year rules: 2021–2023 waiver gone, $400 coming in 2027

This is where most outdated advice lives, so here is the current sequence, verified against the statute:

• Formed 2021–2023: AB 85 waived the first-year $800 for LLCs that organized or registered on or after January 1, 2021 and before January 1, 2024. That window is closed.
• Formed 2024–2026: the waiver expired and was not extended. Year one costs the full $800, due by the 15th day of the 4th month after your Articles are filed.
• First tax year beginning 2027–2029: SB 122, the budget trailer bill signed June 29, 2026, amends §17941 so these LLCs pay $400 instead of $800 for their first taxable year only. Year two returns to the normal $800.

When the $800 is due — and the year-one double hit

• First year: due by the 15th day of the 4th month after you file Articles of Organization. The FTB’s own worked example: register with the Secretary of State on June 18, and the first $800 is due September 15 of the same year.
• Every year after: due by the 15th day of the 4th month of the taxable year — April 15 for calendar-year LLCs. Note that this lands near the start of each tax year, not the end: you’re prepaying the year you’re in.
• How you pay: Form 3522, the LLC Tax Voucher, or online through the FTB’s Web Pay.

The separate LLC fee: $900 to $11,790 on gross receipts

Once total California income reaches $250,000, R&TC §17942 adds the LLC fee on top of the $800:

The fee is prepaid as an estimate by the 15th day of the 6th month of the current tax year — June 15 for calendar-year LLCs — using Form 3536, and underpaying the estimate draws a 10% penalty on the shortfall (a safe harbor applies if you pay at least the prior year’s fee). Any remaining balance is reconciled and paid with the Form 568 return.

Form 3522 vs 3536 vs 568

Filing extensions are automatic in California — but they extend the filing, never the payment. The $800 and the fee are due on the original dates regardless.

The 15-day rule, and how to turn the tax off

The 15-day rule. Under R&TC §17946, an LLC is not subject to the annual tax or the fee for a taxable year in which both are true: the taxable year lasted 15 days or less, and the LLC conducted no business. In practice: Articles filed December 17 or later (in a 31-day month) with the LLC dormant until January means no $800 for that stub year. File December 10 and you owe the full $800 for three weeks of existence — which is why year-end filers so often wait for January.

Cancelling for good. The tax accrues every year until the LLC is properly cancelled with both the FTB and the Secretary of State. Per FTB Pub 3556, that means filing a timely final return and paying the $800 for that final year, conducting no California business afterward, and filing Form LLC-4/7 (Certificate of Cancellation) within 12 months of the final return. A young LLC that never conducted business and is cancelled within 12 months of organizing can use short-form cancellation (LLC-4/8) — the one clean way to erase the first-year $800. Walking away without cancelling just stacks up taxes, penalties, and eventually suspension.

The out-of-state trap: why a Wyoming LLC run from California still owes $800

This is the most valuable thing this page can tell you. Under §23101, “doing business” means actively engaging in any transaction for the purpose of financial or pecuniary gain in California — and the FTB looks at where the people are, not where the paperwork is. The FTB’s published position is that a foreign LLC is doing business here when a member, manager, or agent conducts the LLC’s business from California — so a California resident running an out-of-state LLC’s operations and finances from California can make that LLC a California taxpayer even when every asset sits in another state. (Courts have trimmed the edges of this: in Swart Enterprises v. FTB (2017) a genuinely passive, tiny minority member did not create nexus. Active management from California is the fact pattern that does.) A Wyoming LLC whose member runs it from a laptop in Los Angeles is doing business in California. So is a Nevada LLC holding a boat berthed and used in California when its owner operates it from here.

Separately, an out-of-state LLC is doing business in California if its in-state numbers cross any of these thresholds. These are the 2025 figures; the FTB indexes them for inflation every year, so confirm the current-year amounts with the Franchise Tax Board before relying on them:

• Sales in California exceed $757,070 or 25% of total sales;
• Real and tangible property in California exceeds $75,707 or 25% of total property;
• Payroll in California exceeds $75,707 or 25% of total compensation.

The consequences of qualifying: register with the Secretary of State as a foreign LLC, file Form 568, and pay the same $800 annual tax (plus the LLC fee on California income) — on top of whatever the formation state charges. The “form in Wyoming, skip the $800” plan doesn’t save the $800; it adds a second state’s costs to it, plus back taxes and penalties when the FTB catches up.

Where FilingDesk fits

FilingDesk forms LLCs in Wyoming, Delaware, and Florida today — $99 flat plus the state fee: Wyoming $199 all-in, Delaware $209, Florida $224, with a human specialist reviewing every filing and no upsells. California formation is on our roadmap. If your business or asset genuinely lives outside California, a Wyoming holding LLC is a clean, private container — and we’ll handle the entity, the EIN, and the operating agreement. But we’ll also tell you what this whole page just told you: if the company is operated from California, the FTB’s $800 follows you to any state you form in, and the right answer is usually forming where you actually do business. When the structure fits, start your LLC.

Frequently asked questions

Sources

• California FTB — Limited Liability Company (annual tax, LLC fee, due dates)
• California FTB Publication 3556 — LLC Filing Information
• California FTB — Due dates for businesses (Forms 3522, 3536, 568)
• California FTB — Doing business in California (indexed §23101 thresholds)
• R&TC §17941 — Annual tax on limited liability companies
• R&TC §17942 — LLC fee brackets on total California income
• R&TC §23101 — 'Doing business' defined
• SB 122 (2026, Ch. 23) — $400 first-year annual tax for 2027–2029 formations

This guide is general information, not legal advice. FilingDesk is not a law firm.