Because of the complexity of tax laws and their strict enforcement, it is strongly recommended that companies acquire specific assistance from a certified public accountant or tax attorney regarding tax questions and tax return preparation. You can find more information about this at http://www.boe.ca.gov/info/taxoverview.htm or accountants or tax attorneys may be found in the local telephone Yellow Pages under “accountants” or “attorneys, taxation law.”
State of California Business Tax Information:
A business operating in California may be liable for taxes based on the company’s annual income. Such taxes are paid to the Franchise Tax Board (FTB).
A business that registers with the Secretary of State has completed the necessary procedure to register for purposes of annual taxes payable to the FTB. The Secretary of State communicates the registration of the business with the Franchise Tax Board, which in turn sends the company the appropriate forms to file annual taxes.
Sole proprietorships and general partnerships are not subject to a tax, but the owner of a sole proprietorship and the partners of a general partnership pay annual state taxes on their business income at the rate applicable to the owner or partner.
Limited partnerships and limited liability partnerships must pay an annual $800 tax if they conduct business in California, are organized in California, or have registered with the Secretary of State. Tax on income derived from a limited partnership or limited liability partnership is paid by the partner at the rate applicable to the partner.
Limited liability companies classified as partnerships are subject to an annual tax, plus a fee based on total income. LLCs classified as corporations follow corporation rules to pay their annual state tax.
Corporations doing business in California are required to prepay their annual franchise tax. Payments for the first taxable year are made to the Secretary of State which in turn transmits the amount to the FTB; subsequent annual payments of franchise tax are made to the FTB. The amount of tax payable to the FTB is measured by the income of the preceding income year derived from business done in California, with a minimum payment.
A recent law provides that every corporation incorporating or qualifying to do business in California on or after January 1, 2000, will not be subject to the minimum franchise tax for its first and second taxable years. This exemption from the minimum franchise tax is not applicable to any corporation that reorganizes solely for the purpose of avoiding payment of its minimum franchise tax. Additionally, this new law applies only to corporations, and not any other form of business.
The California Franchise Tax Board offers information on required taxes for each type of business structure at: http://www.taxes.ca.gov/Income_Tax/incbus.shtml
Additional Tax Information
Business Tax Information
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Access information and download California tax forms for General Partnerships.
Access information and download California tax forms for Limited Partnerships.
Limited Liability Partnerships
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Limited Liability Companies
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Federal Tax Information from the IRS
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Payroll Tax Information
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Payroll Tax Forms
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Payroll Tax Seminars
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State Forms & Publications on Employment Issues and Taxes
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Federal Employment Tax Requirements for Businesses
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Personal Income Taxes
California Tax Information
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Tax Information from the IRS
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Sales, Property, and Use Taxes
Sales & Use, Property and Special Taxes
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Tax Help for Businesses and Individuals
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Payroll Tax Seminars
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