California LLC Tax: What Owners Must Pay and File (2026)

Most California LLCs owe a flat $800 annual tax to the California Franchise Tax Board, every year, regardless of whether the business made a dime. On top of that, if your LLC’s California-source total income clears $250,000, a tiered LLC fee kicks in separately. Both obligations run until you formally cancel with the California Secretary of State.

Here’s what to do right now:

Confirm your SOS registration status and make sure your LLC is in good standing.
Pay the annual tax using Form FTB 3522 (LLC Tax Voucher) or FTB’s Web Pay for Businesses by the 15th day of the 4th month of your tax year (April 15 for calendar-year LLCs).
Estimate and pay the tiered LLC fee using Form FTB 3536 if your California income is approaching or exceeding a specified threshold, due by the 15th day of the 6th month (June 15 for calendar-year LLCs).
File Form 568 (Limited Liability Company Return of Income) by the original due date.
Never assume a filing extension covers your payment. It does not.

Pro Tip: The LLC fee is calculated on gross California-source income, not net profit. You can owe a substantial fee in a year when the business lost money.

What is the California LLC annual tax and who must pay it?
How the tiered LLC fee works and what income counts
How to file and pay: forms, deadlines, extensions, and penalties
Does your LLC trigger California’s “doing business” rules?
What happens if you miss payments: suspensions, forfeitures, and cancellations
Common mistakes that cost California LLC owners money
Key Takeaways
The part most guides skip about California LLC taxes
How Tollivercpa helps California LLC owners stay compliant
Official sources and forms for California LLC filings

What is the California LLC annual tax and who must pay it?

Every LLC doing business or organized in California owes the $800 annual LLC tax. That covers domestic LLCs formed in California, foreign LLCs registered to do business here, and any LLC that conducts business in California for even a single day of the taxable year.

The California Franchise Tax Board administers this obligation. It is not a tax on income. It is a flat annual charge that continues regardless of revenue, activity level, or profitability.

Who specifically must pay:

Domestic LLCs organized under California law
Foreign LLCs registered with the California Secretary of State
LLCs conducting business in California even without formal SOS registration (though registration is required separately)

Timing: For calendar-year LLCs, the $800 is due April 15. For fiscal-year LLCs, it’s due by the 15th day of the 4th month after the beginning of the taxable year. For a brand-new LLC, the first payment is due by the 15th day of the 4th month from the date of SOS filing.

First-year exemptions: For tax years beginning on or after January 1, 2021, and before January 1, 2024, LLCs that organized, registered, or filed with the SOS were not subject to the $800 tax for their first tax year. That legislative window has closed. If you formed your LLC in 2024 or later, check current FTB guidance for any active exemption before assuming you qualify. Additionally, if you cancel your LLC within one year of organizing, you may file a Short Form Cancellation (SOS Form LLC-4/8) and avoid the $800 for that first year.

Pro Tip: The $800 is never prorated. An LLC active for one day in a taxable year owes the full amount. Formation timing matters more than most new owners realize.

How the tiered LLC fee works and what income counts

The LLC fee is separate from the $800 annual tax. It applies when your LLC’s total California-source income exceeds $250,000, and the fee amount scales with income.

Current fee tiers (from FTB’s LLC fee schedule):

Total California-Source Income	LLC 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

What counts as “total income” for fee purposes: Per FTB Publication 3556, the fee base is gross income plus cost of goods sold derived from or attributable to California. Net profit is irrelevant here. A business with $800,000 in California gross receipts and $750,000 in expenses still owes the $2,500 fee.

Estimated fee deadline: You must estimate and pay the LLC fee by the 15th day of the 6th month of the current tax year. For calendar-year LLCs, that’s June 15. Use Form FTB 3536 (Estimated Fee for LLCs) for this payment.

Underpayment penalty: If your estimated fee falls short, a 10% penalty applies unless your estimate equals or exceeds the prior year’s total fee. That safe-harbor rule is your best protection against a surprise penalty at year-end.

Where to report: The LLC fee is reported on Form 568 and calculated using Schedule IW. Pass-through income from partnerships or other LLCs flows into this calculation based on your distributive share, and apportionment rules apply if your LLC has income both inside and outside California.

Pro Tip: If your LLC receives a distributive share from another pass-through entity, that share counts toward your California fee base. Track it separately throughout the year so it doesn’t blindside you in June.

How to file and pay: forms, deadlines, extensions, and penalties

Four forms drive California LLC compliance. Knowing which does what prevents the most common and costly mistakes.

Form 568 (Limited Liability Company Return of Income): the annual tax return for your LLC, reporting income, deductions, the $800 tax, and the tiered LLC fee. For calendar-year LLCs classified as partnerships, the original due date is the 15th day of the 3rd month after the close of the tax year (March 15). Single-member LLCs owned by an individual follow the 15th day of the 4th month (April 15).
Form FTB 3522 (LLC Tax Voucher): used to pay the $800 annual tax. Calendar-year LLCs pay by April 15. This form is separate from Form 568 and has its own mailing address.
Form FTB 3536 (Estimated Fee for LLCs): used to pay the estimated tiered LLC fee by June 15 for calendar-year LLCs.
Form FTB 3537 (Payment for Automatic Extension): used if you owe a balance when filing on extension. An automatic six-month extension to file Form 568 is available, but it does not extend the payment deadline for the $800 tax or the LLC fee.

The extension trap: Filing an extension gives you more time to submit paperwork, not more time to pay. The $800 annual tax and the estimated LLC fee are both due on their original deadlines regardless of whether you file Form 568 on time or on extension. Penalties and interest accrue from the original due date, not the extended one.

Accepted payment methods per FTB 3522 instructions:

Web Pay for Businesses at ftb.ca.gov (fastest, with immediate confirmation)
Electronic funds withdrawal when e-filing
Mail with a check or money order and the FTB 3522 voucher

Penalties for late payment: Interest accrues from the original due date. A separate late-payment penalty applies on top of that. If you missed a payment, pay it as soon as possible to stop the interest clock, and contact the FTB to confirm how to apply the payment to the correct tax year.

Does your LLC trigger California’s “doing business” rules?

California’s doing-business definition is broader than most out-of-state owners expect. Your LLC is doing business in California if it meets any of the following:

It is organized or commercially domiciled in California.
It is actively engaged in any transaction for financial gain in California.
Its California sales, property, or payroll meet or exceed the annual thresholds set by the FTB (these thresholds are inflation-adjusted each year, so check the current FTB guidance for the applicable tax year).

Partnerships and LLCs treated as partnerships are also considered doing business in California if a general partner or member is doing business on their behalf in California. The reverse is also true: a member may be considered doing business in California because the LLC itself is.

Steps for a foreign LLC starting California activity:

Register with the California Secretary of State and obtain a California file number.
File and pay with the FTB starting with the first year of California activity.
Understand that SOS registration alone creates the $800 obligation, even before any revenue is earned.

Pro Tip: Public Law 86-272 may protect a purely out-of-state business from California income tax if its only California activity is soliciting orders for tangible personal property. But it does not protect against the $800 annual tax or the LLC fee, and it does not apply to services or digital goods. Remote workers in California can also create nexus unexpectedly.

What happens if you miss payments: suspensions, forfeitures, and cancellations

Falling behind on the $800 tax, the LLC fee, or the Statement of Information filed with the SOS triggers consequences that go beyond a penalty notice.

Administrative suspension and forfeiture:

The FTB suspends the LLC for unpaid taxes or unfiled returns.
The SOS may forfeit the LLC’s rights for failure to file the Statement of Information or pay the associated $25 penalty.
A suspended or forfeited LLC loses the right to conduct business, bring lawsuits, or enforce contracts in California.

Reinstating a suspended LLC:

File all missing tax returns with the FTB.
Pay all outstanding taxes, fees, and penalties.
Obtain a Certificate of Revivor from the FTB.
Resolve any SOS issues separately (file the Statement of Information, pay the $25 penalty if applicable).

Stopping the $800 permanently requires formal cancellation. Simply closing your doors, stopping operations, or letting the LLC go dormant does not end the annual tax obligation. The FTB will continue billing $800 every year until the SOS records show a filed cancellation.

How to formally cancel:

File SOS Form LLC-4/7 (Certificate of Cancellation) for a standard dissolution.
File SOS Form LLC-4/8 (Short Form Cancellation) if the LLC qualifies (generally, LLCs that have not conducted business or issued membership interests, or those canceling within the first year).
File a final Form 568 with the FTB, checking the “Final Return” box.
Confirm the FTB has closed the account.

The California Tax Service Center at taxes.ca.gov is a useful starting point for cross-agency guidance on dissolution and cancellation steps.

Common mistakes that cost California LLC owners money

Most California LLC penalties trace back to a handful of recurring errors. Recognizing them in advance is far cheaper than correcting them after the fact.

The most frequent mistakes:

Using net profit instead of gross income for the LLC fee. An LLC with $600,000 in gross California receipts and thin margins still owes the $2,500 fee. Many owners discover this only when Form 568 is prepared at year-end.
Assuming the filing extension covers payment. The six-month extension for Form 568 is a paperwork extension only. The $800 and the estimated fee are due on their original dates.
Underestimating the LLC fee mid-year. If June rolls around and your books are months behind, you’re guessing at your income. A 10% underpayment penalty on a $6,000 fee is $600 you didn’t need to spend.
Not formally canceling with the SOS. Owners who stop operating but never file cancellation paperwork keep receiving $800 bills, sometimes for years.
Nexus surprises for out-of-state LLCs. A single remote employee or contractor in California can create a filing obligation. The doing-business thresholds are inflation-adjusted annually, so a threshold that didn’t apply last year might apply this year.

Practical prevention steps:

Reconcile your books monthly, not annually. Real-time bookkeeping lets you track gross receipts against the $250,000 fee threshold throughout the year, not just in April.
Set calendar reminders for April 15 (annual tax), June 15 (estimated fee), and the Form 568 due date.
Use the prior-year fee as your safe-harbor estimate when income is uncertain.
Document your apportionment methodology if you have income from multiple states.

Pro Tip: Monthly bookkeeping isn’t just good practice for California LLCs. It’s the only reliable way to catch a fee threshold crossing before the June 15 estimated payment deadline.

Key Takeaways

California LLC owners face two separate annual obligations: the flat $800 franchise tax and a tiered LLC fee based on gross California-source income, both of which require separate forms, separate deadlines, and separate payments.

Point	Details
$800 annual tax	Due by the 15th day of the 4th month of your tax year; pay with Form FTB 3522 or Web Pay.
Tiered LLC fee	Applies when California-source gross income exceeds $250,000; estimate due June 15 using Form FTB 3536.
Extension ≠ payment	A six-month filing extension for Form 568 does not extend the $800 or fee payment deadlines.
Formal cancellation required	Filing SOS Form LLC-4/7 or LLC-4/8 is the only way to stop future $800 obligations.
Tollivercpa	Handles Form 568 preparation, estimated fee calculations, and SOS dissolution steps for Kern County LLC owners.

The part most guides skip about California LLC taxes

California’s LLC tax structure punishes inaction more than ignorance. The $800 keeps running whether you’re open, dormant, or completely unaware the obligation exists. The LLC fee hits businesses with strong revenue and thin margins especially hard, because the fee base is gross income, not what’s left after expenses. A laundromat or pet care business doing $600,000 in California revenue owes the $2,500 fee even in a year when equipment repairs wiped out the profit.

What I see most often isn’t owners who don’t know the $800 exists. It’s owners who know about it but conflate the payment deadline with the filing deadline, or who assume their accountant handled it when the accountant was only engaged for the annual return. The estimated fee payment in June is the one that catches people off guard, because it requires you to know your income trajectory in the middle of the year, not at year-end.

The other underappreciated issue is the SOS cancellation requirement. Owners who wind down a business, stop filing, and stop paying often discover years later that the FTB has been accumulating $800 annual tax bills the entire time. Reversing that requires filing all missing returns, paying all outstanding balances, and then going through the revivor process before the LLC can be formally canceled. The cost of doing it right the first time is a single set of cancellation forms. The cost of ignoring it compounds every April.

How Tollivercpa helps California LLC owners stay compliant

California LLC compliance has more moving parts than most owners expect when they first form the entity. Tollivercpa works with small and medium-sized businesses across Kern County to keep those parts from slipping.

The firm handles Form 568 preparation and filing, estimated LLC fee calculations, and the bookkeeping workflows that make June 15 estimates accurate instead of guesswork. For LLC owners facing suspension or forfeiture, Tollivercpa provides FTB and IRS representation to resolve outstanding balances, file missing returns, and guide the revivor process. For owners ready to wind down, the firm walks through the SOS cancellation and final return requirements so the $800 stops for good.

Monthly bookkeeping through Xero means your gross receipts are tracked in real time, not reconstructed at year-end. That single change eliminates the most common source of LLC fee underpayments. Tollivercpa also handles proactive tax planning so you’re not discovering your fee tier in April when the June deadline is already approaching.

To get started, visit tollivercpa.com/pricing or reach out directly to schedule a consultation at 5401 Business Park S., Suite 126, Bakersfield.

Official sources and forms for California LLC filings

Bookmark these directly. The FTB and SOS update thresholds, form instructions, and guidance annually.

FTB LLC overview page: Annual tax rules, fee tiers, filing requirements, and cancellation guidance in one place.
Form FTB 3522 (LLC Tax Voucher): used to pay the $800 annual tax. Download the current-year version from ftb.ca.gov/forms.
Form FTB 3536 (Estimated Fee for LLCs): used to pay the estimated tiered LLC fee by June 15.
Form FTB 3537 (Payment for Automatic Extension): used when paying a balance due while filing on extension.
Form 568 (Limited Liability Company Return of Income): the annual LLC tax return. The 2025 Form 568 booklet includes full instructions.
FTB Publication 3556: Detailed LLC filing information including fee base definitions and Schedule IW instructions.
FTB Web Pay for Businesses: Online payment portal for annual tax, estimated fee, extension, and return payments.
FTB doing-business guidance: Explains nexus tests and thresholds for California activity.
California Secretary of State: SOS Form LLC-4/7 (Certificate of Cancellation) and SOS Form LLC-4/8 (Short Form Cancellation) are available at sos.ca.gov.
California Tax Service Center at taxes.ca.gov: cross-agency resource for business tax and registration questions.

This article is general information, not legal or tax advice. Confirm current rules, thresholds, and form instructions with the FTB, SOS, or a qualified tax professional for your specific situation.