How to File and Pay California’s LLC Tax

An LLC is a business setup that treats the business as a separate entity from the owner in the eyes of the law. If the business is sued or owes money, the owner isn’t personally liable. The owner’s personal properties, such as a car, house, personal bank account, etc., are not at risk. Small business owners choose this, as it comes with the following benefits:

1)      Limited Liability

2)      Easy to run (less paperwork)

3)      It provides tax flexibility

How is such an entity taxed in the state of California?

Table of Contents

What is California LLC Tax?

Suppose you have a Limited Liability Company, in short, an LLC, or even have an out-of-state LLC that does business in California. In that case, you are due to pay California LLC Tax. This obligation is split into two parts: The first is an annual fee you pay each year, irrespective of actually conducting business, and the second is calculated as based on your revenue for the tax year. Here’s an overview of both parts of the tax:

These are the two main parts of this tax:

1. California’s LLC Annual Tax or the $800 Annual Franchise Tax

This is a mandatory fee charged by the Franchise Tax Board (FTB) on all LLCs registered in the state of California & those registered in a different state but carrying out business in California. This is a standard & fixed fee of $800 per year that every LLC must pay with no exemptions made for those LLCs that made no money, whose business is inactive, or even if you are just getting started.

2. Additional Fee for High-Earning LLCs

If your LLC has earned a gross revenue of $250,000 or more, you are liable to pay additional tax. The tax liability starts at $900 and goes up to $11,790, depending on how much you earn.

When is the California LLC Tax due?

California LLC tax due dates can also be split into two parts, as mentioned:

$800 Annual LLC Franchise Tax California— Form FTB 3522

• For calendar-year filers: April 15, 2025 (15th day of the 4th month after the start of the taxable year)
• For fiscal-year filers: 15th day of the 4th month after your fiscal year begins

Additional LLC Fee (Gross Receipts > $250,000) — Form FTB 3536

• By June 15, 2025 (15th day of the 6th month after the beginning of the tax year)
• For fiscal-year filers: 15th of their 6th month

For all businesses that started in late 2024 and early 2025, the payment is due on the same date.

Until 2023, there was a first-year exemption. All LLCs formed in 2024 or later must pay the full $800 tax in their first year.

Which businesses have to pay California LLC Tax?

In 2025, the California LLC tax applies to a range of businesses. Here’s the list and a brief explanation of businesses that must pay California’s LLC tax

1. LLCs Formed in California

All Limited Liability Companies organized in California must pay the $800 annual franchise tax, regardless of whether they generate any income, if they’re actively involved in operations, or whether their composition is that of a single member or multiple members.

2. LLCs Doing Business in California (Formed Elsewhere)

Businesses that are out of the state of California but are doing business in California should register with the California Secretary of State as a foreign LLC.

These businesses are also due to pay both parts of California LLC tax, i.e., the mandatory annual fee ($800 franchise tax) & the gross receipts fee, which is the revenue that crosses the stated threshold.

The phrase ‘doing business’ includes:

• Having a physical office or store in CA
• Hiring employees or agents in CA
• Soliciting sales or clients regularly in CA or
• Deriving any income from California sources

For instance, if your Delaware LLC operates an e-commerce store that ships products from a California warehouse, you’re considered “doing business” in CA and must pay.

3. LLCs with California-Sourced Income ≥ $250,000

In addition to the $800 tax, any LLC (CA or foreign) that earns $250,000 or more in California-source gross receipts must pay the additional LLC fee, even if the operations are not profitable.

This includes:

• E-commerce with CA customers
• Consulting or freelancing with CA clients
• Real estate rentals in California

What Are the Businesses That Are Exempt from California LLC Tax?

1. Corporations and Sole Proprietors

• Only LLCs and certain pass-through entities pay the LLC-specific taxes.
• C-Corps and S-Corps pay different corporate franchise taxes (not Form 3522).
• Sole proprietorships and partnerships without LLC registration are not subject to this tax.

2. LLCs Not Doing Business in CA (and Not Registered Here)

• If your LLC is:
  • Formed in another state
  • Not doing business in California
  • Not registered with the CA Secretary of State
    

3. Short-Term LLCs (≤15 days with no activity)

• If your LLC:
  • Exists 15 days or fewer in California during a tax year
  • Conducts no business
  • Has no income or expenses

How to file and pay California LLC Tax? & what is the LLC California Tax Rate? (2025)

Here’s how to file and pay California LLC Tax for 2025

 1. Annual LLC Franchise Tax California — Form FTB 3522

All businesses registered as LLCs and carrying out business in California or registered with the CA Secretary of State must pay the $800 annual tax using FTB 3522 to the Franchise Tax Board

The tax may be paid through check or money order with the detached voucher to:

• Franchise Tax Board 
• PO Box 942857 
• Sacramento, CA 94257-0531

When paying by check, make payable to “Franchise Tax Board”, include your SOS file number, FEIN, and “2025 FTB 3522” on the payment.

When you pay online, through Web Pay via a bank transfer or

credit card through OfficialPayments.com, you can skip mailing the voucher.

Note: Convenience fees apply when paying by bank transfer or credit card.  

2. Additional LLC Fee (Gross Receipts > $250,000) — Form FTB 3536

If your LLC’s California-source gross receipts meet or exceed $250,000 in a taxable year, you must pay an additional fee ranging from $900 to $11,790, relative to the amount earned in the tax year.  

How to calculate the Additional LLC Fee?

Find your income for the tax year in the following table and match it to the corresponding value

For instance,

If you run an LLC that has earned a revenue of $3,90,000 in 2024

Annual LLC Franchise Tax (standard across all incomes): $800

Additional LLC Fee: Rate relevant to the income or corresponding rate to $3,90,000 is $900

Total LLC Tax = Annual LLC Franchise Tax + Additional LLC Fee

Hence, California’s LLC Annual tax for the year 2024, in this instance, is $1700

How to pay the additional LLC Fee?

• Start by downloading and filling out Form 3536.

• Mail it with a check/money order (payable to Franchise Tax Board, with SOS file number, FEIN, and “2025 FTB 3536”) to the same address noted above.

• Or pay via Web Pay or credit card online — in that case, do not mail in Form 3536.

3. LLC Return Filing—Form 568 (or 100/100S)

Form 568 is used by LLCs taxed as partnerships, disregarded entities, or joint ventures to report income and reconcile tax and fee payments with FTB.

What is the due date for Form 568?

• March 15 for a partnership and April 15 for a disregarded entity / sole proprietorship LLC.

• However, an extension is available for filing Form 3537, but payments are still due by the original due date.

LLCs taxed as S‑ or C‑Corporations file Form 100S or Form 100, respectively, by the relevant corporate due date. The due dates are usually March 15 for S‑corps, and April 15 for C‑corps.

What are the penalties and interest dues for delays and non-payments for the California LLC Tax

• Late or missed annual $800 payment using Form 3522 results in penalties and interest accruing from the due date until paid.
• Underpayment of the estimated fee through Form 3536 results in a 10% penalty on the difference if underpaid, unless you’ve paid at least last year’s fee; in that case, interest accrues from the return due date.

Conclusion

This article outlines which businesses are due to pay California LLC tax, which companies are exempt, a brief on how to calculate your tax liability, and how to file your LLC tax with the Franchise Tax Board (FTB)

California’s strict tax laws are often a subject of contention, and navigating through them can be complicated.  

Here are our references to:

California’s Inheritance Tax

California’s Infamous Exit Tax

California State Disability Insurance Tax

Payroll Taxes in California

California Estate Tax

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FAQs: California LLC Tax (2025 Edition)