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Short answer
A new California corporation does not pay the $800 minimum franchise tax in its first tax year; the minimum starts in year two. A California LLC pays the $800 annual tax from its first year, due by the 15th day of the 4th month after formation. The LLC first-year exemption only applied to tax years 2021 to 2023.
How this tool works
Rules from the California Franchise Tax Board. A company formed in another state also owes the minimum if it is “doing business” in California, for example above the yearly sales, property or payroll thresholds.
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Updated October 30, 2026. General information, not legal or tax advice.
Questions founders ask
Making transactions for profit in California, being organized or commercially domiciled there, or exceeding the sales, property or payroll threshold. For 2025: sales over $757,070, or property or payroll over $75,707, or 25% of the total.
No. The minimum is due even with no income, as long as the company exists in or does business in California.
Dissolve or cancel the company with the state and file a final return. Zovud handles dissolutions.
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