Short answer: yes. A California LLC formed today owes the $800 annual tax for its first year. AB 85's first-year exemption only covered LLCs formed from 2021 through 2023. A new law cuts the first-year amount to $400 for first taxable years starting in 2027 through 2029. After year one, it's $800 a year until you cancel.
If you've read that California waived the $800 for new LLCs, that was true for three years. A lot of guides were written during that window and never updated.
Why do people think the first year is free?
AB 85 exempted LLCs that organized or registered with the Secretary of State on or after January 1, 2021, and before January 1, 2024. That window closed. The Franchise Tax Board's 2026 instructions for Form 3522 describe the $800 tax with no first-year exemption, and FTB's LLC page still lists AB 85 only for those 2021–2023 tax years.
When is the first $800 due?
The first payment is due by the 15th day of the 4th month after you file your Articles of Organization. FTB's own example: articles filed June 19, tax due September 15. After that, it's due by the 15th day of the 4th month of each taxable year, which is April 15 for a calendar-year LLC. If the date lands on a weekend or holiday, you have until the next business day.
The tax is owed whether or not you do any business. FTB says an LLC organized in California owes it even if it conducts no business in the state.
Why can forming in late fall cost you twice?
Because your first taxable year starts the day you file, and the next one starts January 1. Say you form on November 10, 2026. Your first $800 is due by February 15, 2027 (or the next business day). Your 2027 tax, another $800, is due April 15, 2027. That's $1,600 within about two months for seven weeks of 2026.
Does the 15-day rule still apply?
Yes. An LLC doesn't file a return or pay the annual tax for a taxable year if both of these are true:
- The taxable year is 15 days or less. For a calendar-year LLC, that means forming on or after December 17.
- It did no business in California during that period.
FTB adds that when an LLC meets the 15-day rule, that short period isn't treated as its first taxable year. The first taxable year starts January 1.
What changes in 2027?
California's 2026 budget package included SB 122 (Chapter 23, Statutes of 2026). For taxable years beginning on or after January 1, 2027, and before January 1, 2030, an LLC pays $400 instead of $800 for its first taxable year. FTB has confirmed the change on its "What's New" page for tax forms.
In practice:
- First taxable year starts in 2026: you pay $800.
- First taxable year starts in 2027, 2028 or 2029: you pay $400 for that year, then $800 a year after.
- Formed December 17–31, 2026 and did no business before January 1: by our reading, your first taxable year starts January 1, 2027, so the $400 rate should apply. FTB hasn't published that exact example, so confirm with a tax professional before you count on it.
What else does a California LLC owe?
- The LLC fee. If your total California income is $250,000 or more, you also pay a fee: $900, $2,500, $6,000 or $11,790 depending on the bracket. You estimate it and pay by the 15th day of the 6th month with Form 3536.
- Form 568 every year. A single-member LLC owned by an individual files by the 15th day of the 4th month after the owner's tax year ends (April 15 for most people). A multi-member LLC taxed as a partnership files by the 15th day of the 3rd month (March 15).
- A Statement of Information. $20 to the Secretary of State within 90 days of forming, then every two years.
Late payment brings a penalty plus interest. If an LLC doesn't file or pay, FTB can suspend it, and the other party to a contract signed during suspension can have it voided.
So what should you do?
- If you haven't formed yet and aren't doing business, there's no prize for forming early. If you're looking at November or December, waiting until January avoids the double payment above and, starting in 2027, gets you the $400 first-year rate.
- If you've already formed, put your first due date on the calendar now. You can pay online with FTB's Web Pay or mail Form 3522.
- If you formed and never got going, look at the short-form cancellation (Secretary of State Form LLC-4/8). FTB says an LLC that cancels this way within a year of organizing isn't subject to the first year's $800, as long as it meets the form's conditions.
Your next step
Our California LLC guide lists every state fee and filing with its official source and the date we last checked it. To see how California compares, read LLC cost by state. Or see your free roadmap, no account needed.
Sources: FTB: Limited liability company · FTB Pub. 3556 · 2026 Form FTB 3522 instructions · FTB Tax News: 15-day rule · FTB: What's New with Tax Forms · FTB: Due dates for businesses · 2025 Form 568 booklet · SB 122 (2026), chaptered text · CA Secretary of State LLC fees. This is general information, not legal or tax advice.