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Written by : Malcom Ciganek
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do I have to pay California's $800 franchise fee for my LLC Amanda here from the business finance coach where I'm simplifying accounting taxes and business planning if this sounds like something you're interested in you can subscribe to my youtube channel while still watching this video by clicking the watermark in the bottom right corner of your screen back to the California Franchise Tax fee of $800 so do you really have to pay this fee you can see the state web site behind me you just search ftb.ca.gov and you can just search FTB $800 LLC California and up will come the links for this site it does sound a little confusing as you'll see in this graph here where they talk about the annual California fee and then they talk about incomes greater than two hundred and fifty thousand dollars now just to verify I actually called and spoke to the state and part of why this is confusing is because there's two fees or taxes that apply to your LLC if you have an LLC in the state you have to pay the $800 franchise tax fee every year everyone really pays the $800 fee for any LLC formed in the state the second aspect is if you have an annual LLC fee which is in addition to that $800 fee which you pay every year as long as the income is less than 250,000 in your business you don't have to worry about an additional tax but once your gross income sales goes above 250,000 then you will have an additional tax to pay to the state of California the next thing I want to show you is the amount of that additional tax here we are in the instructions and this is where you'll see the amounts of the second feed two hundred fifty thousand to four hundred and ninety nine nine nine nine a dollar short of five hundred thousand pay $900 five hundred to a million right before million pay twenty five hundred dollars a million to almost five million pay six thousand dollars and then the next bracket over five million pay eleven thousand seven ninety like many things taxes you know it's like the person making 1 million is paying the same as the person making four point five million so you know is it fair I don't know but regardless this is the tax for California and then you can see that they give a an example down here and they go through for each business the annual tax which is that eight hundred dollar fee plus the LLC fee so the annual tax is eight hundred and the LLC fee is based on if you earn more than two hundred fifty thousand and your income and so I know that that's a little confusing I'd love to hear any questions you have in the comments below if you enjoyed this video let me know otherwise subscribe I'll see you next time have a beautiful day bye
Thanks for your comment Dominique Toyama, have a nice day.
- Malcom Ciganek, Staff Member
hey what's up everybody this is attorney dan and today i want to talk to you about llcs and when do you have to pay your annual franchise tax for an llc so this is straight from the california franchise tax board website and i'll put this link in the notes below and so uh there's two dates you need to know obviously the one you do when you first form your llc it's due um what's called a short year the fourth the fifth day the fourth month from the day you file uh with the secretary of state to pay your first annual tax so the example they give you if you form your new llc on june 18 2020 your annual tax will be on september 5th uh 15 2020 which is uh four months plus 15 days now after that uh you have to pay on the 15th day of the fourth month of your taxable year so now most most people most businesses the taxable year is based on the calendar year and so january 1st is the first day of the new taxable year and so 14 days and 15 months is april 15th now just pay that obviously on or before that date generally speaking if you have a pass-through uh entity then you would typically uh pay for it on the same day as uh you file your personal tax returns but in any case whether you follow along with your personal tax returns or you pay it separately make sure you keep the receipts and mark these particular dates down so that you don't forget to pay your annual franchise tax every year and they are due regardless of whether you do business or not so please understand that you do have to pay the 800 annual franchise tax every year uh in one of my other videos um governor newsom has actually weighed the first year franchise tax for new llc's through 2023 um so generally speaking you do not have to pay for your first year and your franchise tax through 2023 if you are new llc um formed between now and 20 uh december 31st 2023 but subsequently uh for um for any other uh times that you have to pay the fourth month and the 15 the fourth month plus 15 days from your uh taxable year okay i do have another video showing how you pay this online go on click search for that video if this is a pop-up how to pay your annual franchise tax online okay this is attorney dan hope's been helpful talk to you soon bye you
Thanks Rosie your participation is very much appreciated
- Malcom Ciganek
About the author
I've studied waste management at Philander Smith College in Little Rock and I am an expert in category theory. I usually feel numb. My previous job was soil scientist I held this position for 13 years, I love talking about reading and yoyo. Huge fan of Demi Lovato I practice american football and collect handbags.
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