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California LLC Fee

California has a minimum tax of $800 on all corporations, and imposes the same $800 as a fee for LLCs.

I have a question on LLCs taxed as S-corporations. The state waives the minimum tax on newly formed or qualified S corporations filing an initial return for their first taxable year. But does that waiver apply to LLCs electing to be taxed as S-corporations? On the FTB's web page dealing with LLCs they don't mention that the waiver applies to them. But I just want to be certain that I'm not getting this wrong.

Thanks.

Reply to
Stuart O. Bronstein
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In Mid 2020 AB 85 was signed into law. From the Legislative Analysts description:

This bill, for taxable years beginning on or after January 1, 2020, and before January 1, 2024, in which a specified appropriation is made in any budget measure, would exempt a limited partnership, a limited liability partnership, and limited liability company that files, registers, or organizes to do business in this state, as provided, from the payment of the annual tax in its first taxable year.

Reply to
Alan

Thanks. I found that after I posted the question. But the question still remains for LLCs filed after 2024. What was the prior rule? As far as I can tell, an LLC that elected to be taxed as an S- corporation did not qualify for the first year S-corporation waiver.

Reply to
Stuart O. Bronstein

Yes, the prior rule required the LLC minimum fee. AB 85 was designed to equalize the playing field.

Reply to
Alan

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