California Business Portal

Are limited liability companies (LLCs) required to pay annual tax in their first year of doing business in California?

Are limited liability companies (LLCs) required to pay annual tax in their first year of doing business in California?

Yes, newly-formed LLCs pay the $800 annual tax payment due on the 15th day of the 4th month after the LLC registers with the California Secretary of State (SOS) or the date it begins doing business, if business began before it registers with the SOS. Any portion of a month is considered a full month for calculating the annual tax payment due date.

However, California Code provisions allow LLCs to cancel and they are not required to pay the first year annual tax if they meet certain conditions (Corporations Code Section 17350.5 and California Revenue and Taxation Code (R&TC) Section 17941(e)).

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