Have You Paid Your California $800 Minimum Franchise Tax?

APRIL 15TH TAX DEADLINE!!

For those of you who own businesses, please keep in mind there is a very important item that is easily missed during tax time which may cause unnecessary penalties ~ that is the $800 California minimum franchise tax due by April 15, 2014.

 

WHO IS REQUIRED TO PAY $800?

The following business entities are required to pay the $800 tax:

  • “C” Corporations
  • “S” Corporations
  • Limited Liability Companies (LLCs)
  • Limited Partnerships (not General Partnerships)

Why do these business entities PAY California Franchise Tax?

  • Incorporated or organized in California
  • Qualified or registered to do business in California
  • Doing business in California, whether or not incorporated, organized, qualified, or registered under California law

How is the overall California Franchise Tax calculated?

The franchise tax is equal to the larger of your California income multiplied by the appropriate tax rate or the $800 tax.

 

HOW TO PAY $800 FRANCHISE TAX?

Use Form FTB 100-ES to send payment to the Franchise Tax Board:

OR

Use Web Pay for Businesses to make electronic payments to the Franchise Tax Board anytime you wish.

What if you started business in 2012 and did NOT pay $800 tax?

California does NOT require newly incorporated or qualified corporations, including LLCs treated as corporations, to pay the minimum franchise tax in their first taxable year. This means payment was not required in 2012 but it is required in 2013 but is required in 2014.

FOR MORE INFORMATION ON THIS SUBJECT, REVIEW THE GUIDE FOR STARTING BUSINESS IN CALIFORNIA: https://www.ftb.ca.gov/forms/misc/1060.pdf

 

What’s Due on 4/15/2014

  1. Federal Individual Income Tax Returns
  2. Most State Individual Income Tax Returns
  3. Federal Partnership Returns including LLCs
  4. Extension of Time to file tax returns
  5. 1st Quarter Estimated Tax Payments
  6. California $800 Franchise Tax Fee

Comments (10)


  1. Hello,

    I have a couple of questions. If I were to file an LLC this month, March 2014, when does the beginning of my tax year start?

    Also, does this mean I would NOT need to pay the minimum franchise tax until 2015?

    Thank you

    1. This is from their publication 3556

      Due Dates for First-Year Annual Tax Payment
      Domestic LLCs have until the 15 day of the 4 month after they file their Articles of Organization with the SOS to pay the first-year annual tax

  2. Hello,

    I started an LLC in 2011 but never got the business going nor made any money, do I still need to pay the $800 annual fee?

    Thank you,

    JF

    1. JF,
      Yes you do for every year. Corporations receive a first year exemption however, LLCs need to pay every year since inception, regardless of $0 activity.

  3. I already filed the articles of dissolution last year in May, but since it was after I filed my taxes and I did not mark it on my company’s tax return that it was the last one for my company, so I will have to file my company’s last return even though it no longer has any assets or liabilities. Will I have to pay the franchise tax for 2015?

  4. my C corp. has been closed in 1/30/2015, do I need to pay $800 estimated tax for 2015 and can I file final tax return 1120 for 2014?

  5. Hello,

    I just wondered if the first year exemption is still valid now or only for 2012? e.g. I started a c-corporation in 2014 and had no business/income. Do i need to pay the $800 annual fee?

    Thank you,

    Sarah

  6. If I filed the Articales of Organization with the State of Calif on Jan 8, 2015, do I have the Franchise fee due April 15, 2015?

  7. I am incorporated in Oklahoma (S corporation) in 2009. Still have rental property in Oklahoma, but just started doing business in California in January 2015 using Oklahoma corporation, do I need to register doing biz in CA? Do I have to pay $800 franchise tax in 2015 or April 2016?
    Thank you in advance for any advice

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