California LLC fee: the $800 tax and the fee on top

The $800 annual tax

Every LLC that is doing business or organized in California must pay an annual tax of $800. It is due by the 15th day of the 4th month after the start of the tax year: April 15 for a calendar year. A new LLC has until the 15th day of the 4th month from the date it files with the Secretary of State to pay its first year’s tax.

The tax is owed whether or not the LLC makes money.

The LLC fee

If an LLC’s total California income reaches $250,000, it also pays an LLC fee:

Total California income	LLC fee
Under $250,000	$0
$250,000 to $499,999	$900
$500,000 to $999,999	$2,500
$1,000,000 to $4,999,999	$6,000
$5,000,000 or more	$11,790

The fee is based on total income from California, not profit. A business with high sales and thin margins can owe it even with a small profit. The LLC estimates and pays the fee by the 15th day of the 6th month of the current tax year, on Form FTB 3536, and files its return on Form 568.

What an S election changes

California follows the federal choice: an LLC must have the same classification for California and federal tax. So an LLC that elects S status is taxed in California as an S corporation, and the LLC tax and fee stop, because they apply only to an LLC that is not taxable as a corporation.

In their place, California taxes an S corporation at 1.5% of its California net income, with an $800 annual minimum franchise tax. The return changes from Form 568 to Form 100S.

	Single-member LLC (default)	LLC taxed as an S corporation
Annual tax	$800 LLC tax	1.5% of net income, $800 minimum
Fee by total income	$900 to $11,790 from $250,000	None
California return	Form 568	Form 100S

The first year differs by how the business got there. An LLC newly formed and treated as an S corporation from its first year owes no $800 minimum for that first year (the 1.5% still applies). An existing LLC that elects gets no first-year relief: it owes the $800 minimum, or 1.5% of net income if larger, for its first S year, in place of the $800 LLC tax it paid before.

Does it come out ahead?

Under $250,000 of income, the $800 LLC tax becomes the S corporation tax: $800, or 1.5% of the profit left after your salary if that is larger. Above $250,000, the election also removes the LLC fee. Whether the election pays overall depends on the payroll tax it saves, which the calculator works out with California’s rules, including State Disability Insurance on your salary. The California page has worked examples.

Sources

• California Franchise Tax Board, Limited liability company
• FTB, S corporations
• FTB Publication 1123, Guide to Common Forms of Ownership (LLC classified as an S corporation)
• FTB, Limited liability company
• R&TC 23153(f)(1), (3)
• FTB 2025 Form 100S Booklet, General Information B
• R&TC 23802(c)
• R&TC 17941(d)
• R&TC 17942(a)(1)
• FTB, Limited liability company (LLC treated as a corporation)

Every figure was read on an official page and checked a second time. Checked October 24, 2026. How we check facts.

An explanation of public rules, not tax advice.