When Is the $800 Annual LLC Fee Due in California?
Navigate California's $800 annual LLC fee. Discover its significance, precise payment deadlines, and straightforward methods to fulfill this state requirement.
Many states require annual fees for Limited Liability Companies (LLCs). California imposes a specific $800 annual fee, which is mandatory for LLCs. This fee is distinct from other taxes, such as income taxes, or initial filing fees. Paying this annual fee is important for LLCs to maintain their legal standing in the state.
Understanding the $800 LLC Annual Fee
The $800 annual fee for LLCs in California is formally known as an annual franchise tax. The California Franchise Tax Board (FTB) imposes this tax on all LLCs registered with the California Secretary of State or actively doing business in the state. This obligation applies to both domestic and foreign LLCs and is due even if the entity does not generate income or is inactive for the taxable year. The fee is a charge for the privilege of operating as an LLC in California.
The base $800 annual franchise tax is a flat fee, not tied to the LLC’s income level. However, LLCs with gross income exceeding a specific threshold may owe additional fees. For example, if an LLC’s income reaches $250,000 or more, an additional fee is assessed, increasing with higher income brackets. This structure means that while the $800 is the minimum annual commitment, some LLCs will have a greater overall tax obligation.
Navigating Payment Due Dates
The standard due date for the $800 annual LLC fee is the 15th day of the fourth month following the beginning of the LLC’s taxable year. For most LLCs operating on a calendar year, this means the annual payment is due by April 15th. This consistent annual deadline applies to subsequent years after the initial payment.
The due date for an LLC’s first annual fee differs. This initial $800 payment is due by the 15th day of the fourth month after the LLC was filed or approved by the California Secretary of State. For example, if an LLC is formed in November, the payment would be due by February 15th of the following year.
A first-year tax waiver, applicable for LLCs formed between January 1, 2021, and December 31, 2023, has expired. LLCs formed in 2024 and beyond must pay the $800 annual franchise tax for their first taxable year. This can result in two $800 payments being due within a short timeframe for LLCs formed late in the calendar year.
Methods for Paying the Annual Fee
The California Franchise Tax Board (FTB) provides several convenient methods for paying the $800 annual LLC fee. One common approach is online via the FTB’s Web Pay for Businesses service. To use this, select “Bank Account” under “Make a Payment” on the FTB’s website, then proceed to “Web Pay Business.” Specify “Limited Liability Company (LLC)” as the entity type and “Annual Tax Payment (Form 3522)” as the payment type. The system will prompt for the LLC’s 12-digit entity ID, which can be found via the California Secretary of State’s website if unknown.
Another payment method is by mail, using the LLC Tax Voucher, Form FTB 3522. Complete Form FTB 3522 with the LLC’s name, federal employer identification number (EIN), and applicable taxable year. Enclose the payment, typically a check or money order, with the voucher but do not staple it. Mail payments to FRANCHISE TAX BOARD, PO BOX 942857, SACRAMENTO CA 94257-0631.
The FTB also supports Electronic Funds Transfer (EFT) for electronic payments. Payment by credit card is an option through the FTB’s online payment portal, though this method usually incurs a service fee.