3 ms·

Maybe states should learn from Delaware. The minimum tax required for an LLC in California is $800. So even if you have an LLC that makes no money, you still ha

Maybe states should learn from Delaware. The minimum tax required for an LLC in California is $800. So even if you have an LLC that makes no money, you still have to pay California $800 per year.

arjawn 6y ago
California actually started to waive this fee in year 1. "As of June 2020, the $800 franchise tax fee has been waived in the first year in California." However even with this fee waived it still makes A TON OF SENSE to file your LLC in the beginning of the year vs the end (OR do a delayed effective filing https://www.startpack.io/blog/what-is-an-llc-delayed-effective-date https://www.startpack.io/blog/what-is-an-llc-delayed-effecti...) Otherwise, you end up paying the annual fees twice in ~ 1 year. Here's an example before CA started to waive this fee of how brutal this could be in CA for LLC owners: California has an annual franchise fee tax of $800. This fee is due every calendar year, not every 12 months. Calendar Year: January - December Every 12 Months: 12 months from Today So this means if you were to start an LLC that was "born" or "officially created" on December 31st, 2020, you would be responsible for paying the full $800 franchise tax fee for the year of 2020! Fast forward to January 1st, 2022, one year and one day later, even though essentially only one year has passed by, instead of owing $800 to the state of California... you would owe $1600! To make things worse, the first annual franchise tax fee payment is due within the first 3-4 months from when your LLC is formed, and from then on, due by April 15th each year. So if you were to create a California LLC that went in to existence on December 31st, 2020, you would have to pay $1600 in the first 5 months!
- mixmastamyk 6y ago
  Filed under, "information that would have been useful a week ago." :-D

3 ms·

Maybe states should learn from Delaware. The minimum tax required for an LLC in California is $800. So even if you have an LLC that makes no money, you still ha

by briandear 6y ago

Maybe states should learn from Delaware. The minimum tax required for an LLC in California is $800. So even if you have an LLC that makes no money, you still have to pay California $800 per year.

arjawn 6y ago
California actually started to waive this fee in year 1. "As of June 2020, the $800 franchise tax fee has been waived in the first year in California." However even with this fee waived it still makes A TON OF SENSE to file your LLC in the beginning of the year vs the end (OR do a delayed effective filing https://www.startpack.io/blog/what-is-an-llc-delayed-effective-date https://www.startpack.io/blog/what-is-an-llc-delayed-effecti...) Otherwise, you end up paying the annual fees twice in ~ 1 year. Here's an example before CA started to waive this fee of how brutal this could be in CA for LLC owners: California has an annual franchise fee tax of $800. This fee is due every calendar year, not every 12 months. Calendar Year: January - December Every 12 Months: 12 months from Today So this means if you were to start an LLC that was "born" or "officially created" on December 31st, 2020, you would be responsible for paying the full $800 franchise tax fee for the year of 2020! Fast forward to January 1st, 2022, one year and one day later, even though essentially only one year has passed by, instead of owing $800 to the state of California... you would owe $1600! To make things worse, the first annual franchise tax fee payment is due within the first 3-4 months from when your LLC is formed, and from then on, due by April 15th each year. So if you were to create a California LLC that went in to existence on December 31st, 2020, you would have to pay $1600 in the first 5 months!
- mixmastamyk 6y ago
  Filed under, "information that would have been useful a week ago." :-D