What is California's franchise tax and when do I need to pay it?

California's franchise tax is a flat $800 annual LLC tax collected by the Franchise Tax Board (FTB) from every LLC, regardless of income, revenue, or activity. The first-year exemption expired for tax years beginning on or after January 1, 2024, so an LLC formed today owes the $800 for its first tax year, due by the 15th day of the 4th month after the date the Secretary of State filed your Articles. Combined with the $70 formation fee and the $20 Statement of Information, that puts first-year state cost at $890. You pay the tax to the FTB with Form 3522, not to the Secretary of State, and the two filings are separate: the Statement of Information goes to the Secretary of State on its own schedule. The flat structure means an unprofitable startup owes the full amount, so build it into your cash-flow plan. If your LLC has total California income of $250,000 or more, an additional income-based LLC fee starting at $900 applies on top. Set up the FTB payment as soon as your LLC formation is effective.

When is my California LLC's Statement of Information due?

Your first California Statement of Information is due within 90 days of the date the Secretary of State filed your Articles of Organization. After that, an LLC files it every two years rather than annually. The biennial filing period is the calendar month in which your Articles were filed plus the five calendar months immediately before it, ending on the last day of that anniversary month, so an LLC whose Articles were filed in July files between February 1 and July 31 of its filing year. The fee is $20, and filing late brings a $250 penalty that the Franchise Tax Board assesses on the Secretary of State's behalf and bills separately, plus possible suspension or forfeiture of your LLC's powers, rights and privileges. Only the Secretary of State can waive the penalty. Put both the 90-day date and your filing month on the calendar and file Form LLC-12 through the Secretary of State at https://www.sos.ca.gov/business-programs/business-entities before the period closes.

How do I file my annual Statement of Information in California?

To file your California Statement of Information, open the California Secretary of State's online filing system at https://www.sos.ca.gov/business-programs/business-entities and complete Form LLC-12. The fee is $20, and it is the same whether you file online or mail the form to Sacramento. You report current member or manager names, your registered agent's name and address, and your principal business address. File the first one within 90 days of registration, then once every two years during the period running from the month your Articles were filed back through the five preceding months. Missing the deadline triggers a $250 penalty assessed by the Franchise Tax Board on the Secretary of State's behalf, and the LLC's powers, rights and privileges can be suspended or forfeited, which reaches ordinary business activity such as enforcing your contracts in court. Only the Secretary of State can waive that penalty. File Form LLC-12 through the Secretary of State's online system to keep your LLC in good standing.

Why are California LLC compliance costs so much higher than other states?

California's $890 first-year total is driven almost entirely by the $800 annual LLC tax imposed by the Franchise Tax Board, not by anything the Secretary of State charges. The $70 Articles of Organization fee is actually the 13th lowest formation fee in the country, but that advantage disappears the moment the franchise tax lands. The $800 minimum applies whatever your LLC earned. Zero revenue still means $800, and the tax keeps accruing until the LLC is formally cancelled. On top of it, an LLC with total California income of $250,000 or more owes an income-based LLC fee starting at $900. The Secretary of State's side is cheap by comparison: the Statement of Information is $20 and biennial, so it averages about $10 a year. For owners, that means budgeting at least $800 a year for state tax compliance from the first year onward, which is why California is the most expensive state in the country for ongoing LLC costs. Unlike states that scale fees to profit, the $800 is flat. Your next step: file your Articles of Organization with the Secretary of State, then set two reminders. One for the $800 payment to the Franchise Tax Board, due the 15th day of the 4th month after your filing date, and one for the Statement of Information due within 90 days of registration.

Compliance · CA

California LLC Annual Compliance Requirements (2026)

Everything your California LLC must do to stay in good standing, annual report deadlines, registered agent rules, and state-specific obligations.

First-Year Total$880

Annual Ongoing$810/yr

vs National Avg+ $647.97

By Edmond Hui · Last updated: August 22, 2026

California offers LLC owners access to one of the world's largest economies, with deep consumer markets and world-class talent across software, biotechnology, and entertainment. It also carries the heaviest ongoing compliance cost of any state. First-year state cost is $890: $70 for the Articles of Organization (Form LLC-1), $20 for the Statement of Information, and $800 for the Franchise Tax Board's annual LLC tax, which applies in year one for any LLC formed today. The $70 formation fee is actually on the cheap side, ranking 13th lowest in the country, but the $800 annual tax makes California the most expensive state to keep an LLC running year after year. The report itself is light. California's Statement of Information (Form LLC-12) is $20 and biennial, not annual, but the first one is due within 90 days of registration, which is the deadline owners most often miss. After that the filing period runs from the calendar month your Articles were filed back through the five preceding calendar months. File late and the Franchise Tax Board assesses a $250 penalty on the Secretary of State's behalf, billed separately from the $20 filing, and the LLC's powers, rights and privileges can be suspended or forfeited. Only the Secretary of State can waive that penalty. Understanding the two agencies and their two separate deadlines is most of what California compliance asks of you.

Stat card for California LLC compliance costs: $880 unavoidable first-year total and $810 recurring each year after, +$647.97 against the $232.03 national first-year average. Its biennial report costs $20. — First-year total bundles the state filing fee with any report or entity tax due in year one; the recurring figure is what California costs every year after that. Source: California's published filing requirements and fee schedule, verified July 2026; national average from MyStateLLC's 50-state compliance dataset.

Annual Report Requirements

Due: Biennial, in the anniversary month plus the five preceding months

Fee: $20

Frequency: biennial

How: Online or by mail

Full California Annual Report Guide →

Registered Agent Requirements

What California requires of an LLC registered agent, what the role costs, and how to keep the appointment current with the Secretary of State.

California Registered Agent Requirements →

Late Filing Penalties

Penalty: $250, billed by the Franchise Tax Board on the Secretary of State's behalf. Only the SOS can waive it. Continued failure risks suspension or forfeiture of the LLC's powers

California Late Fee Guide →

California-Specific Compliance Considerations

Mandatory $800 Annual Franchise Tax

The Franchise Tax Board charges every California LLC a flat $800 annual tax regardless of income or activity. It is owed even if the LLC does no business, and it keeps running until the LLC is formally cancelled, so a dormant California LLC still accrues $800 a year. It is the largest recurring compliance expense California business owners face.

No First-Year Franchise Tax Exemption

The first-year exemption applied only to tax years beginning on or after January 1, 2021 and before January 1, 2024, and it has expired. An LLC formed today owes the full $800 for its first tax year, due by the 15th day of the 4th month after the Secretary of State filed its Articles and paid with FTB Form 3522.

The Statement of Information Is Biennial, But the First One Is Due in 90 Days

The first Statement of Information is due within 90 days of the Articles of Organization being filed, which catches many new owners. After that an LLC files only every two years, during a period made up of the calendar month the Articles were filed plus the five calendar months immediately before it. An LLC formed in July, for example, files between February 1 and July 31 of its filing year.

Dual Government Agencies

California LLCs answer to two agencies with separate deadlines and separate payments: the Secretary of State for the $20 Statement of Information, and the Franchise Tax Board for the $800 annual tax and any income-based LLC fee. The $250 late-filing penalty sits across both, because the Franchise Tax Board assesses and bills it on the Secretary of State's behalf.

An Income-Based Fee on Top of the $800

An LLC with total California income of $250,000 or more owes an additional LLC fee to the Franchise Tax Board: $900 at $250,000 to $499,999, $2,500 at $500,000 to $999,999, $6,000 at $1,000,000 to $4,999,999, and $11,790 at $5,000,000 or more. It is charged on gross California income, not profit, so a high-revenue, low-margin LLC can owe it in a year with no taxable income.

Frequently Asked Questions

Edmond Hui · Founder, MyStateLLC

Edmond Hui is a software engineer and serial entrepreneur based in New York who has founded multiple online businesses across e-commerce, media, and information publishing. Before transitioning into tech, he spent years as a commercial real estate professional closing deals totaling over 100,000 square feet, giving him firsthand experience with business formation and entity structuring. He built MyStateLLC to provide the free, state-specific LLC guidance he wished existed when forming his own companies.