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 (28)


  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

  8. My husband formed his LLC as an S Corp on Nov 16, 2013 and filed and paid the $800 the next to year. On April 1, 2016 he received a letter from the IRS asking him what he wanted them to do with the $800 for 2013? On April 11, he received a letter asking why he never filed and paid the $800.
    Are they inept? Does he owe $800 for 2013 since the LLC was formed so late in the year? We have called the IRS a dozen times and cannot get an answer. Please help!

  9. If you form a company xyz LLC, and you want 2 DBA under the xyz LLC, (DBA “ABC shop” & “ABC store”) do you have to pay Franchise Tax on each one?

  10. According to FTB publication 1060:
    Newly incorporated or qualified corporations are not
    required to pay the minimum franchise tax in their first
    taxable year.

  11. Hi, I have a question, My client is a C- corporation, they already paid $800 annual fee in Quarter 4, Is requiered send the Form 3539 anyway?? to get the extension and avoid any kind of penalties ( there’s no income subjet to tax in this state).

  12. Hello! I started my single owner LLC on January 1st 2016 and forgot to pay the annual fee ($800) before April 15. Now I am reading that I won’t have to pay it for the first year, is that true?
    This would match with the fact that on the Web Pay – Login on the Franchise Tax Board webpage my entity info doesn not match their records maybe?
    Thanks for any advise!

  13. Hi I’m incorporated in California on July 2017 (S corporation) .. Am I get first year exemption from first-year franchise annual tax of $800. or Is my first franchise fee due on April 15, 2018?

  14. I filed for LLC in California in September 2017, decided to dissolve before starting. It’s been less then two months, do I still need to pay the FTB $800?

  15. I filed for articles of incorporation and it was filed on Jun 08, 2018. What would be the best fiscal year for me?

    Thank you.

  16. I created a LLC last year and never work or made any money I don’t think I will ever use this LLC. How can I close it or dissolve the LLC with out paying those 800.00.

  17. Before September 15, 2018, we did our Income Tax but did not have enough money to pay the Franchise Tax Board as $800. So how much we should pay the late fee from September till January 2019?
    Also only LATE FEE or INTEREST too?
    Thanks if you can reply to this.

  18. I had an LLC in kentucky, and moved to California with no intention to do any business while in CA. Will I still owe the California Franchise Fee? I moved here in August 25th, it is now March 2nd. I am working to dissolve the LLC in KY now.

  19. I incorporated my company in Delaware. It is an online only company doing business on a few websites all over the world. I happen to live in California, but the revenue earned is not mailed or sent to my local bank as I use an online small business bank account through B of A. If I’m not accepting revenue in California, and am using any revenue as “personal income” and I am the only business owner, do I need to pay the $800 tax? Is this tax, in any way, monies I can write off when filing my personal IRS taxes?

  20. $800.00 every 12 months is outrageous considering people are just started creating there business and
    it’s mandatory in California too pay this fee hundreds of thousands of people that don’t ever get started producing products and services because of this fee preventing California GDP potential.

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