An LLC is a legal structure; S corporation treatment is a tax election for an eligible entity. A default-taxed California LLC generally owes $800 plus any income-based LLC fee. A general California S corporation pays 1.5% of California-source net income, subject to an $800 minimum unless the first-taxable-year exception applies.
Official source: California Franchise Tax BoardOfficial source: California Legislative InformationOfficial source: California Franchise Tax BoardVerified against the California Secretary of State and FTB on Oct 21, 2026
Corp USA is not a law firm and does not provide legal advice. Private information and filing service; not a government agency.
- Verified Oct 2026 CA SOS & FTB Rules
- $0 Markup on State Pass-Through Fees
- Physical Corporate Kits & Seals (CorporateKits.com)
- Live Filing Support: (667) 274-0865
Start with the right question.
Separate payment vouchers, returns and elective tax
FTB Form 3522 pays the $800 LLC annual tax; Form 3536 pays an estimated LLC income fee by the 15th day of the sixth taxable-year month; Form 568 is the LLC Return of Income. Eligible pass-through entities may elect the 9.3% PTE tax on qualified net income, paid using Form 3893 and elected using Form 3804. Review eligibility, owner credits and current-year payment rules; it is not automatic tax savings.
Official source: California Franchise Tax BoardCheck the 15-day short-year rule
R&TC § 17946: an LLC with a taxable year of 15 days or less and no California business during that year is exempt from the annual LLC tax for that short period. For a calendar-year LLC, December 17–31 is 15 days inclusive. This is not a general first-year exemption and does not waive all filing obligations.
Official source: California Legislative InformationReview PTE eligibility separately
The elective PTE tax is 9.3% of qualified net income with an owner-credit mechanism. Form 3893 is the payment voucher; Form 3804 makes the election with a timely original return. Review current-year prepayment and credit rules with a tax adviser.
Official source: California Franchise Tax BoardCompare different income measures
The S corporation calculation uses California-source net income. The LLC fee uses total California income, not net profit. Moving one slider cannot establish that the tax treatments have equal taxable bases, or that an election saves money.
Official source: California Franchise Tax BoardModel the minimum separately
A general S corporation’s standard tax is the greater of 1.5% of California-source net income and $800. Eligible newly formed or qualified S corporations do not pay that minimum on their initial first-taxable-year return, but still owe the income-based amount. Financial S corporations have different rates and are excluded here.
Official source: California Franchise Tax BoardEvaluate the election before filing
Form 2553 governs federal S election eligibility and timing. The deadline generally is two months and 15 days after the beginning of the effective tax year, or during the preceding year. Shareholder taxes, federal taxes, payroll, reasonable compensation and administrative costs are outside this comparison.
Official source: Internal Revenue ServiceYour preparation checklist
- Confirm federal S election eligibility
- Separate California net income from total income
- Review first-year minimum exception eligibility
- Ask a tax adviser about the full federal and state picture
Illustrative California tax comparison
Illustrative California tax comparison
Default-taxed LLC
$800$800 annual tax + $0 income fee
General S corporation
$8001.5% income calculation: $750
$800 minimum applies
Illustrative only, not tax advice. Different income measures are intentional. No total savings claim: federal, shareholder, payroll and administrative costs are excluded. Financial S corporations are excluded.
FTB Form 3522 pays the $800 LLC annual tax; Form 3536 pays an estimated LLC income fee by the 15th day of the sixth taxable-year month; Form 568 is the LLC Return of Income. Eligible pass-through entities may elect the 9.3% PTE tax on qualified net income, paid using Form 3893 and elected using Form 3804. Review eligibility, owner credits and current-year payment rules; it is not automatic tax savings.
Official source: California Franchise Tax BoardR&TC § 17946: an LLC with a taxable year of 15 days or less and no California business during that year is exempt from the annual LLC tax for that short period. For a calendar-year LLC, December 17–31 is 15 days inclusive. This is not a general first-year exemption and does not waive all filing obligations.
Official source: California Legislative InformationOfficial source: California Franchise Tax BoardKeep the requirements separate.
| Requirement | Verified detail / confirmation needed | Official authority |
|---|---|---|
| FTB Forms 3522 / 3536 / 568 | FTB Form 3522 pays the $800 LLC annual tax; Form 3536 pays an estimated LLC income fee by the 15th day of the sixth taxable-year month; Form 568 is the LLC Return of Income. Eligible pass-through entities may elect the 9.3% PTE tax on qualified net income, paid using Form 3893 and elected using Form 3804. Review eligibility, owner credits and current-year payment rules; it is not automatic tax savings. | Official source: California Franchise Tax Board |
| 15-day short taxable year / R&TC § 17946 | R&TC § 17946: an LLC with a taxable year of 15 days or less and no California business during that year is exempt from the annual LLC tax for that short period. For a calendar-year LLC, December 17–31 is 15 days inclusive. This is not a general first-year exemption and does not waive all filing obligations. | Official source: California Legislative Information |
| PTE elective tax / Form 3893 | Eligible entities: 9.3% of qualified net income; Form 3893 payment voucher, Form 3804 election, owner credit rules and current-year prepayment conditions. AB 150 introduced the program; later legislation governs current years. | Official source: California Franchise Tax Board |
| LLC annual tax | $800; general first-year exemption expired | Official source: California Franchise Tax Board |
| LLC income fee | Starts at $250,000 total California income; separate from $800 | Official source: California Franchise Tax Board |
| General S corporation | 1.5% California-source net income, $800 minimum | Official source: California Franchise Tax Board |
| Eligible new S corporation | Minimum waived for initial first taxable year; 1.5% still applies | Official source: California Franchise Tax Board |
Carry the decision forward.
Corp USA is not a law firm and does not provide legal advice. State fees are pass-through. Service fees and taxes are separate. Review the order price before payment.
Before your next step
No. It is an illustration of specified California entity-level tax rules, not tax advice or a full tax comparison.
Official source: California Franchise Tax BoardS status is a tax election. An eligible legal entity makes the federal election using Form 2553.
Official source: Internal Revenue Service