California Corporation Taxes

California corporations can face both entity-level income tax and separate annual business taxes, depending on whether the company is treated as a C corporation, an S corporation, or a corporation subject to a separate franchise or margin-tax regime. This guide is rendered from the source-backed tax profile so future updates stay tied to official state tax sources.

At a Glance

Topic	Current treatment
C corporation tax	8.84%
S corporation tax	1.5%
Minimum tax	$800 minimum franchise tax
Separate business taxes	Yes
Sales tax	Yes — 7.25%

Corporate Income Tax

The current California profile lists a C corporation rate of 8.84% and an S corporation rate of 1.5%.

Use the FTB sources for current corporate and S corporation treatment.

If your company elected S corporation treatment federally, do not assume the state follows federal law automatically. The state profile is the right place to confirm whether the state recognizes the election and whether it still imposes a separate entity-level tax.

Franchise, Margin, Gross Receipts, and Other Business Taxes

The current profile shows the following business-tax items:

Franchise Tax (llc): $800 annual LLC tax plus a separate LLC fee once California income exceeds $250,000. Due: 15th day of the 4th month after formation and annually after that.

These taxes can apply in addition to corporate income tax. That distinction matters because a corporation may owe a minimum, franchise, or margin-style tax even in a low-profit year.

Sales Tax for Corporations

California has a base statewide sales tax rate of 7.25%. Local district taxes can increase the combined rate depending on the location.

If the corporation sells taxable goods or taxable services, use California Department of Tax and Fee Administration for registration and rate verification. The current profile points to: https://onlineservices.cdtfa.ca.gov/_/.

Filing Planning and Entity Choice

The state tax profile is also useful for entity-choice planning. If the S corporation rate, minimum tax, or PTE election rules are materially different from the C corporation rules, that can change whether an S election makes sense. The right comparison is not just federal tax savings; it is the full state stack of income tax, minimum tax, franchise tax, sales tax, and annual compliance cost.

State-Specific Quirks

Uneven estimated tax timing: California individual estimated tax installments are not equal quarterly percentages.

Bottom Line

For a California corporation, the main compliance risk is overlooking the extra layer beyond ordinary corporate income tax. Check the minimum tax, the separate business-tax regime, and the state's sales-tax registration rules every time the profile is refreshed.