California

California Franchise Tax Guide for LLCs

Complete 2026 guide to Californiafranchise tax — rates, due dates, filing forms, exemptions, and how to minimize your LLC's state tax burden.

Does California have franchise tax on LLCs?

Yes — $800/yr minimum (even with $0 revenue)

California Franchise Tax Structure

How it's calculated

$800 minimum franchise tax + LLC fee tier: $0 (under $250K), $900 ($250K-$500K), $2,500 ($500K-$1M), $6,000 ($1M-$5M), $11,790 ($5M+)

Due date

April 15 for calendar-year entities

Filing form

Form 568 (LLC Return of Income)

Key Things to Know About California Franchise Tax

California's $800 minimum is due EVEN if the LLC has no revenue or even if it never actually operated
If you form in Delaware/Wyoming but operate in California, you still owe the $800
First-year exemption: most LLCs owe $0 in the first year thanks to the AB 85 waiver (subject to change)

Possible Exemptions

Non-profits organized under §501(c)(3) (apply separately)
Dormant LLCs that file a proper dormancy claim

Verify eligibility with a CPA or the California Department of Revenue before claiming an exemption.

FAQ

Does my LLC owe franchise tax in California?

Yes. California imposes franchise tax or equivalent: $800 minimum franchise tax + LLC fee tier: $0 (under $250K), $900 ($250K-$500K), $2,500 ($500K-$1M), $6,000 ($1M-$5M), $11,790 ($5M+)

When is California franchise tax due?

April 15 for calendar-year entities. Missed deadlines typically trigger penalties, interest, and loss of good standing. Always mark your calendar or use FormifyAI's compliance reminder service.

How do I file franchise tax in California?

Form 568 (LLC Return of Income). Most states now offer online filing through their Department of Revenue or Secretary of State portal. Payment can usually be made by ACH, credit card, or check.

What happens if I don't pay California franchise tax?

Failure to pay triggers: monetary penalties + interest on unpaid amounts, loss of good standing with the state, inability to file lawsuits or enforce contracts, and eventual administrative dissolution of the LLC. Administrative dissolution can retroactively pierce liability protection.

Can I avoid California franchise tax by forming elsewhere?

Generally no. If your LLC operates in California (has employees, office, or significant activity there), you'll owe California state taxes regardless of formation state. Forming in Delaware or Wyoming to "avoid" California taxes typically costs MORE (both states' fees) while providing no real tax benefit.

Are there exemptions from California franchise tax?

Possible exemptions: Non-profits organized under §501(c)(3) (apply separately); Dormant LLCs that file a proper dormancy claim. Consult a CPA familiar with California tax law for your specific situation.

Stay compliant with California franchise tax

FormifyAI tracks your California compliance deadlines and sends reminders so you never miss a franchise tax filing. Plus EIN, operating agreement, registered agent, and BOI report all bundled.

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