California $800 Minimum Franchise Tax: When Startups Must Pay

California requires most corporations and limited liability companies to pay a minimum franchise tax of $800 each taxable year.
This applies to entities that are incorporated, registered, or doing business in California.

Last verified: November 2025

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Overview

The minimum franchise tax applies each year even if a company operates at a loss or has no income.
Entities must pay the greater of their calculated tax or $800.
References: FTB – Business Entity Filing Information, FTB – LLC Tax Information

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Entities Subject to the Tax

Corporations

Every corporation that is incorporated, registered, or doing business in California must pay the $800 minimum franchise tax.
The tax is due by the first quarter of each accounting period.
Corporations with no business activity for a taxable year of 15 days or less are not required to pay the minimum tax for that year.
Source: FTB C Corporation Tax Page

Limited Liability Companies (LLCs)

Every LLC that is doing business or organized in California must pay an annual tax of $800.
Some LLCs formed or registered between January 1, 2021 and January 1, 2024 qualified for a temporary first-year exemption under Assembly Bill 85.
Source: FTB LLC Filing and Payment Requirements

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Key Dates and Filing

• C corporations: due on the 15th day of the 4th month after the close of the taxable year
• S corporations: due on the 15th day of the 3rd month after the close of the taxable year
• LLCs: annual tax payment due by the 15th day of the 4th month after beginning of the taxable year

If registered or conducting business, the payment is required even if the entity is inactive or reports a loss.
Reference: FTB – Business Due Dates

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How to Pay

Corporations use Form 100 (C corporations) or Form 100S (S corporations) to report income and pay tax.
LLCs pay the annual tax using Form FTB 3522 (LLC Tax Voucher), which can be submitted through Web Pay or by mail.
Forms and instructions: FTB Forms and Publications

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Definition of Doing Business

An entity is considered to be doing business in California if it meets any of the following:

• Conducts transactions for financial gain in California
• Has sales, property, or payroll in California exceeding set thresholds
• Is registered with the California Secretary of State

Reference: FTB – Doing Business in California

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Penalties and Interest

If the $800 minimum tax is not paid by the due date:

• A late payment penalty of 5 percent of the unpaid tax applies, plus 0.5 percent for each month the balance remains unpaid
• Interest accrues on unpaid balances until payment is received

Source: FTB – Penalties and Interest

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Summary

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Official References

• Franchise Tax Board – Corporations Overview
• Franchise Tax Board – Limited Liability Company Overview
• Franchise Tax Board – Due Dates
• Form FTB 3522

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