California LLC Compliance: The $800 Franchise Tax and Everything Else You Owe
California LLCs face an $800 minimum franchise tax, a gross receipts fee, and biennial filing requirements. Here is what you owe, when, and what happens if you miss it.
The $800 surprise
Every LLC registered in California, whether formed there or foreign-qualified, owes an $800 minimum franchise tax every year. It does not matter if the LLC earned zero revenue. It does not matter if the LLC is dormant. If it exists in California's records, the $800 is due.
This catches many founders off guard, particularly those who formed a Delaware LLC and then qualified it in California. They now owe Delaware's $300 annual tax plus California's $800 franchise tax, and they have not even started operating yet.
The fee schedule
| Obligation | Amount | Deadline |
|---|---|---|
| Minimum franchise tax | $800 | 15th day of 4th month after fiscal year-end |
| Gross receipts fee | $0-11,790 | 15th day of 6th month after fiscal year-end |
| Statement of Information | $20 | Every 2 years, within filing period |
| First-year exemption | $0 | First tax year only |
The gross receipts fee
On top of the $800 minimum, LLCs with total income from California sources above $250,000 owe an additional fee:
| Total California income | Fee |
|---|---|
| $250,000 - $499,999 | $900 |
| $500,000 - $999,999 | $2,500 |
| $1,000,000 - $4,999,999 | $6,000 |
| $5,000,000 and above | $11,790 |
This fee is based on total income (gross receipts), not profit. An LLC with $5 million in revenue and zero profit still owes $11,790 plus the $800 minimum.
The first-year exemption
Since 2021, California has exempted LLCs from the $800 minimum franchise tax in their first taxable year. This applies to both newly formed and newly qualified LLCs. The exemption ends on the first day of the second taxable year, at which point the full $800 is due.
Statement of Information (SI-LLC)
California LLCs must file a Statement of Information every two years. The initial filing is due within 90 days of formation (or qualification). Subsequent filings are due every two years during a six-month window based on your original filing month.
The filing fee is $20. The late penalty is $250. The statement itself is straightforward: manager/member names, addresses, and a brief description of business activity.
Penalties
- Late franchise tax: 5% penalty + 0.5% per month (up to 25%) + interest at the federal short-term rate + 3%
- Late estimated fee: 10% penalty
- Late Statement of Information: $250
- Failure to file tax return: 5% per month penalty (up to 25%) + $18 per member per month
- FTB suspension: California's Franchise Tax Board can suspend your LLC for non-payment, which means you cannot legally conduct business, maintain lawsuits, or defend against them
The suspension trap
Suspension by the FTB is the real risk. A suspended LLC loses the right to do business in California. Any contracts signed while suspended are voidable. Court cases are stayed. Bank accounts may be frozen.
Reinstatement requires paying all back taxes, penalties, and interest, plus filing all delinquent returns. The total cost of a three-year suspension can easily exceed $5,000, all for an $800 annual payment.
How CompCal helps
CompCal tracks your California franchise tax, gross receipts fee, and Statement of Information deadlines automatically. For multi-entity businesses with California-qualified LLCs, the system consolidates every deadline into a single view.