Forming a limited liability company in California involves more than a one time registration payment. An LLC may owe an $800 annual tax, an additional fee when its California income reaches a certain level, and a separate charge to keep its information current with the Secretary of State. These amounts serve different purposes and have different deadlines, which is why they are easy to mix up.
The cost that surprises many new owners is the $800 annual tax. Generally, an LLC organized in California or doing business here owes it even if the business has no profit or has not started operating. The tax continues to apply until the LLC is properly canceled. California’s temporary first year exemption applied to LLCs formed or registered during 2021 through 2023; it does not generally apply to a new LLC formed in 2026. Limited exceptions may apply to a qualifying short form cancellation or a taxable year of 15 days or less with no business activity.
The $800 annual tax: when is it due?
The first year is where many LLC owners get caught. California generally requires the first $800 annual tax payment during the year the LLC is formed, even if the business has not yet earned anything. The deadline is the 15th day of the fourth month after the LLC files with the Secretary of State.
For example, if you form a California LLC on May 1, 2026, the first $800 payment is generally due August 15, 2026. It is not postponed until you file your 2026 return in 2027. That gap between forming the LLC and preparing its first tax return is exactly why the payment is so often missed.
For a calendar year LLC, the next $800 annual payment would generally be due April 15, 2027. That means the first two payments can fall less than a year apart. Mark both dates when you form the company and use Form FTB 3522 or the Franchise Tax Board’s online payment system for the annual tax.
This is an entity cost; separate from the income tax an owner may owe on business earnings. A slow year, a loss, or a decision to leave the LLC unused does not automatically eliminate the $800 obligation. That is one reason to consider both the expected benefits and the ongoing costs before forming an LLC.
The additional LLC fee is based on California income
Some LLCs also owe an LLC fee on top of the $800 annual tax. The fee begins when the LLC’s total income derived from or attributable to California reaches $250,000. California’s calculation generally looks to gross income plus the cost of goods sold, rather than the profit left after ordinary business expenses. An LLC can therefore owe the fee even when its taxable profit is much lower than its revenue.
These are set fee brackets, not percentages. For example, an LLC with $300,000 of total California income may owe the $900 LLC fee and the $800 annual tax, for a combined $1,700 before considering other taxes or filing costs. The precise California income calculation deserves attention if the business has customers or operations in multiple states.
An LLC that expects to owe the additional fee generally estimates and pays it by the 15th day of the sixth month of its taxable year, using Form FTB 3536. For a calendar year LLC, that generally means June 15. Waiting until the annual return is prepared can lead to penalties or interest.
What does it cost to form and maintain the LLC with the state?
The California Secretary of State lists a $70 fee to file Articles of Organization. An LLC must also file an initial Statement of Information within 90 days of registration and another every two years thereafter; the filing fee is $20. These Secretary of State charges are separate from amounts paid to the Franchise Tax Board.
The Statement of Information may seem minor beside the annual tax but missing it can be costly. The Franchise Tax Board states that failure to file can result in a $250 Secretary of State penalty, and unresolved filing problems may affect the LLC’s standing. Put both the tax and Secretary of State deadlines on your calendar.
Does a single member LLC still have to pay?
Generally, yes. Having one owner does not, by itself, remove California’s LLC filing or payment requirements. A single member LLC may be disregarded for federal income tax purposes, meaning its business activity is reported through its owner’s return, while the LLC still has California obligations of its own. LLCs taxed as corporations have different rules, so their treatment should be reviewed separately.
What if you close the business?
Stopping work is different from closing the LLC. If you no longer need the entity, take the formal steps to cancel it and address its final tax filing. Otherwise, the $800 annual tax may continue to accrue even while the business sits idle. The timing and paperwork matter, particularly if an annual tax payment is approaching.
California LLC costs are manageable when they are planned for. Before forming an LLC, estimate the recurring $800 tax, consider whether your California income could trigger the additional fee, and track the filing dates that apply to your entity. If your LLC is already open and you are unsure whether its 2025 or 2026 payments were made, a review now can help identify a missed obligation before more penalties or interest accumulate.
Disclosure: This article provides general information as of September 2026 and is not individualized tax or legal advice. Filing requirements, exceptions, and due dates depend on your LLC’s facts and tax classification. Consult a qualified tax or legal professional about your situation.