FAQ pages are short editorial summaries of the longer state and tax guides. Use the linked state agency before filing or relying on a deadline.
What Taxes Does an LLC Pay in California?
California LLCs pay three main taxes: state income tax (1%–13.3%, passed through to members under Cal. Rev. & Tax. Code §§ 17001–17039.6), an $800 annual franchise tax minimum (Cal. Rev. & Tax. Code § 17941), and sales tax (7.25% state + local rates) on taxable sales. Single-member LLCs are taxed as sole proprietorships; multi-member LLCs are taxed as partnerships unless you elect corporate status.
State Income Tax
California imposes graduated income tax on LLC members at rates from 1% to 13.3% (Cal. Rev. & Tax. Code §§ 17001–17039.6). The LLC itself does not pay income tax; instead, profits pass through to members, who report their share on personal returns. Self-employment tax applies to LLC members (15.3% on net earnings). Estimated tax payments are due April 15, June 15, September 15, and January 15.
Franchise Tax & Gross Receipts Fee
Every California LLC must pay an $800 annual franchise tax due April 15 (Cal. Rev. & Tax. Code § 17941). If your LLC has California-source gross receipts exceeding $250,000, you owe an additional fee based on income brackets (Cal. Rev. & Tax. Code § 17942):
- $250K–$500K: $900
- $500K–$1M: $2,500
- $1M–$5M: $6,000
- $5M+: $11,790
The first-year exemption expired December 31, 2023—all LLCs now pay the $800 tax in their formation year.
Sales Tax
If you sell taxable goods or services, you must register for California sales tax (7.25% state + local rates, totaling 7.25%–10.25%). Register at https://www.cdtfa.ca.gov/.
Tax Elections
You may elect S-corp or C-corp taxation to reduce self-employment tax. File Form 2553 (S-corp) or Form 8832 (C-corp) with the IRS and report the election to the California Franchise Tax Board.
Filing Requirements
File your Statement of Information (Form LLC-12) within 90 days of formation, then every two years ($20 filing fee). Contact the California Franchise Tax Board at https://www.ftb.ca.gov/ for tax account setup and estimated payment guidance.
This is general information, not legal advice.