Annual California Limited Liability Company Fee.
Every California LLC must pay a fee based on total annual income. (This is similar to a gross receipts tax.) The LLC fee is due on or before the 15th day of the 4th month after the close of the LLC’s taxable year. For taxable years beginning on or after January 1, 2005, the following would be used to compute the fee:
If total annual LLC income is: | Equal To or Over | But Not Over | The Fee Is | | $250,000 | $499,999 | $ 900 | | $500,000 | $999,999 | $2,500 | | $1,000,000 | $4,999,999 | $6,000 | | $5,000,000 | and over | $11,790 |
LOOPHOLE: Your LLC’s can elect to be taxed as a regular Corporation or as an S Corporation and thereby avoid the annual California LLC fee which can be as much as $11,790 each year.
Please note the following Corporate Tax Rates are based on profits and not gross receipts, as with an LLC.
S Corporations, other than banks and
financial corporations………………………………………………..1.5%
Regular Corporations, other than banks and
financial corporations………………………………………………..8.84%
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