California $800 Franchise Tax & LLC Fee — Step 7 of 8
This is the cost that makes California expensive: every LLC pays an $800 annual franchise tax, due even in year one. On top of that, LLCs earning $250K+ in California owe an extra gross-receipts fee. Here's exactly what you'll owe, when it's due, and a calculator to see your total.
Every California LLC pays an $800 annual franchise tax to the Franchise Tax Board — including the first year (the old exemption expired). It's paid on Form FTB 3522. If your LLC's California total income is $250,000 or more, you also owe a separate gross-receipts fee of $900 to $11,790 (Form FTB 3536). The first $800 is due by the 15th day of the 4th month after forming.
- Franchise tax
- $800/yr
- Year 1?
- Yes, owed
- Paid on
- FTB 3522
- LLC fee
- $0–$11,790
- Fee form
- FTB 3536
- Agency
- FTB
- Final step
- Step 8 →
The Two California Charges: Tax + Fee
California hits LLCs with two separate charges, and it's important not to confuse them:
- The $800 annual franchise tax — a flat minimum every LLC pays each year regardless of income or profit, on Form FTB 3522.
- The LLC fee — an additional, separate charge that only applies if your California total income hits $250,000 or more, on Form FTB 3536.
So a small LLC pays just the $800. A higher-earning LLC pays the $800 plus a gross-receipts fee that climbs in steps. The calculator below shows your combined annual total.
Yes — the $800 is due in year oneThe AB 85 exemption that once waived first-year tax for new LLCs expired at the end of 2023. For any LLC formed in 2024, 2025, or 2026, the $800 is owed from the first year. Don't rely on outdated articles claiming otherwise — only new corporations still get first-year relief, not LLCs.
Franchise Tax & LLC Fee Calculator
Enter your expected California total income (gross receipts from California sources) to see your combined annual franchise tax and fee:
Combines the $800 minimum franchise tax and the §17942 LLC fee based on California total income. Excludes federal/state income tax on profit (see Step 8). The LLC fee is based on California-source gross income, not net profit. Not tax advice.
The LLC Fee Schedule
The gross-receipts fee is a cliff schedule — cross a threshold and the whole higher fee applies:
| California total income | LLC fee |
|---|---|
| Under $250,000 | $0 |
| $250,000 – $499,999 | $900 |
| $500,000 – $999,999 | $2,500 |
| $1,000,000 – $4,999,999 | $6,000 |
| $5,000,000 or more | $11,790 |
When Everything Is Due
Year 1: by the 15th day of the 4th month after forming. After that: April 15 each year (FTB 3522).
Estimated by the 15th day of the 6th month of your tax year if you'll owe it (FTB 3536).
Your LLC Return of Income reconciles it all — due the 15th day of the 3rd month after year-end (March 15 for calendar-year LLCs).
The back-to-back $800 trapIf you form late in the year, your first $800 covers that short tax year, and the next year's $800 is due the following April 15 — so you can pay $1,600 within a few months. Forming with a January 1 future file date (if you haven't filed yet) avoids the short first year. Plan timing before you file.
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California Franchise Tax — FAQ
Ahmad Adil is the founder and CEO of LLC School. The franchise-tax details here — the $800 annual minimum (including the expired AB 85 first-year waiver), the §17942 gross-receipts fee schedule, the FTB 3522/3536/568 forms, and the due dates — were verified against the California Franchise Tax Board. This is educational information, not tax advice.
About Ahmad Adil → California LLC Overview →