If you own an LLC in California, you may be required to pay the $800 annual franchise tax—even if your business isn’t actively generating income. Understanding when and how this tax applies can help you avoid penalties and keep your business in good standing.
When Is the $800 Annual Franchise Tax Due?
The California Franchise Tax Board (FTB) requires LLCs to pay an $800 annual franchise tax. Here’s how the deadlines work:
- First-Year Payment: The initial The initial $800 annual franchise tax payment is due on the 15th day of the fourth month after your LLC’s formation date.
- Example: If you register your LLC with the Secretary of State (SOS) on June 18, 2025, your first tax payment is due by September 15, 2025.
- Example: If you register your LLC with the Secretary of State (SOS) on June 18, 2025, your first tax payment is due by September 15, 2025.
- Ongoing Annual Payments: After the first year, the $800 annual franchise tax must be paid by the 15th day of the fourth month of each taxable year. This due date aligns with annual tax filing deadlines.
Do You Still Owe the $800 Annual Franchise Tax If Your LLC Isn’t Active?
Yes. Even if your LLC isn’t conducting business or earning income, you are still responsible for the $800 annual franchise tax until your LLC is officially dissolved with the state.
Failure to pay can result in penalties, interest, and even suspension of your LLC. If an LLC is suspended or forfeited, it loses its legal rights, authority, and privileges to operate in California.
How to Avoid Unnecessary Fees
To stop paying the $800 annual franchise tax, you must properly dissolve your LLC by filing the required paperwork with the California Secretary of State. Keep in mind:
- Any unpaid taxes or fees must be settled before dissolution.
- Until your LLC is legally canceled, the tax remains due every year.
Ask an Estate Planning Attorney Today
If you need expert guidance on business formation, compliance, or tax obligations, we’re here to help. Visit Hudack Law Estate Planning Attorney to learn more. We proudly serve California, Utah, and Arizona. Call our toll-free at (877) 314-4309 to schedule a consultation.