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California State Annual Filing Requirements For LLCs

Do you want to create and operate an LLC in the state of California? If so, then you have to get a series of documents together for filing. Keep reading to learn the most crucial continuing state tax filing and reporting requirements for limited liability companies in the state of California.

Statements Of Information: Initial And Biennial

California’s state government mandates you to file your initial information statement in the first 3 months after you file your articles of organization. In order to finish that statement, you have to give a lot of the very same information that was necessary for your articles of organization, plus names and addresses of your LLC manager and members. Other information is also necessary, and this statement is something you can finish online via the Secretary of State website. If you like, you can also download the Form LLC-12 information statement form blank before finishing it on your computer, printing out a physical copy, signing it, and then delivering it by hand or via postal mail. Filing your initial statement involves a $20 fee.

After this, you have to file additional statements of information every other year no later than the conclusion of the anniversary month corresponding to when you first filed the articles of organization of your LLC. In particular, you have a filing period running for half a year previous to your final due date. For instance, if you initially filed your LLC articles of organization on July 15th of an even-numbered year, then you need to file subsequent information statements every even-numbered year between the start of February and the end of July. Like with your initial report, your subsequent reports are something you can either finish online or by downloading the blank form for filing in person or through postal mail. At the time of writing, the filing fees for every biennial information statement holds steady at $20.


LLC Taxes California

The State Business Tax

In terms of income taxes, the majority of LLCs are known as ‘pass-through’ tax entities. More simply put, the burden of paying any federal income taxes just passes right through the LLC, falling instead on the different individuals who are LLC members. In short, LLCs don’t actually pay any federal income taxes, but their members have to.

The state of California puts an annual minimum franchise tax of $800 on traditional LLCs that chose not to get taxed like corporations. On top of owing this $800 minimum, you’ll also pay extra annual fees if the annual gross revenues of your LLC surpass a quarter of a million dollars. That particular fee is based on any LLC income sourced in the state of California, and it ranges (at the time of writing) from a minimum of $900 up to a maximum of $11,790. These fees and taxes can be paid to the FTB, the Franchise Tax Board of the state of California. If you’d like more information regarding the fee/tax, which includes specific guidance on the particular forms your business should use, then consult the FTB website.

In certain cases, LLC owners decide to let their business be treated as if it were a corporation, and this is done for tax purposes. This is a choice made when IRS Form 2553 is filed with the Internal Revenue Service. Visit the website of the IRS for this form. California, like nearly any other state, puts taxes on income from corporations. The state of California designates this as a franchise tax. At the time of writing, a flat rate of 8.84 percent is the franchise tax for net income stemming from any business transactions within the state. Again, this tax is directly payable to the California FTB. If you decided to let your LLC get taxed like a corporation, then you have to also pay this tax. Use the California Form 100 for state corporation income tax returns in order to pay off this particular tax.

Employer Taxes For The State Of California

Are there any employees in your LLC? If the answer is yes, then you have to pay the related employer taxes. Some taxes like these get paid via the IRS to the federal level of government, and those taxes aren’t covered specifically her. (However, note that your federal tax requirements as an employer being with getting an EIN, or employer identification number. On the other hand, employers in the state of California also have to pay state taxes.)

The first thing you’ll have to do is to withhold and then pay any employee income taxes to the EDD, or California Employment Development Department. Start by either registering your business online with the EDD or through the proper Form DE-1 version. Once you get registered, then you have to file the proper withholding taxes quarterly via Forms DE-9 and DE-88ALL. Consult the EDD website for additional information, such as filing online.

Additionally, you’re likely going to have to register for paying state UI taxes, or unemployment insurance. As with withholding income taxes, such taxes get handled by the EDD, and you can also either do it manually with the right Form DE-1 version or online. After that, use Forms DE-9C and DE-9 quarterly to report your wages and pay up any UI taxes due. Consult the EDD website again for additional information and about filing online.

Sales/Use Taxes

Does your LLC sell any goods to California customers? If so, then you have to collect and also pay the proper sales tax. That means you need to register specifically for this purpose with the BOE, or California Board of Equalization, before making regular sales tax payments on any and all goods sold. Register either in person at a designated BOE field office or register online via the BOE website. Once you are registered, you then have a seller’s permit. Following that, you’ll submit your sales tax returns to the California Department of Revenue periodically. You’ll have to finish your various sales tax returns all online. Consult the BOE website for more about all of this.

Other State Registrations

If you are going to do business in states outside of California, you might have to register the LLC in certain states, if not all of them. Every state has its own set of rules about the nature of business and if registration is even required. In many cases, activities such as having a physical business location, hiring any employees with the state, or doing solicitations in many different mediums will mandate registration. The registration process varies by state, but often includes getting a certificate of authority or related document.

Additional Resources