California $800 LLC Fee: When Out-of-State LLCs Owe It

Yes, a Delaware, Wyoming or other out-of-state LLC can owe California’s $800 annual LLC tax. It owes it if it is registered with the California Secretary of State or is “doing business” in California under Franchise Tax Board (FTB) rules. For a Canadian or Australian founder running a US LLC from home, with no people and no office in California, the usual answer is no. It flips to yes when the business is managed from California, someone works for it there, or California sales, property or payroll pass the annual tests.

This guide walks through each test using FTB’s own pages (checked 31 Oct 2026), then the extra LLC fee, the due dates and the penalties. To run your own facts, use the free California $800 LLC Tax Checker.

This is general information, not tax or legal advice. Confirm with a CPA for your situation.

Who owes the $800: the three triggers

FTB’s LLC page is blunt: “Every LLC that is doing business or organized in California must pay an annual tax of $800,” and the tax keeps coming “even if you are not conducting business, until you cancel your LLC” (FTB). The 2026 form FTB 3522 instructions list three cases (FTB 3522):

1. The LLC’s articles of organization were accepted by the California Secretary of State (a California LLC).
2. The LLC holds a certificate of registration from the Secretary of State (a foreign LLC that registered).
3. The LLC is doing business in California.

The first two are paperwork you would know about. The third is the one that catches out-of-state LLCs, because no filing is needed to trigger it.

The doing-business tests

FTB treats you as doing business in California if you meet any one of these (FTB):

• You engage in any transaction for financial gain within California.
• You are organized or commercially domiciled in California.
• Your California sales, property or payroll exceed the annual thresholds.

FTB’s Form 568 booklet adds the rule that matters most for small LLCs: “Regardless of where the trade or business of the LLC is primarily conducted, an LLC is considered to be doing business in California if any of its members, managers, or other agents are conducting business in California on behalf of the LLC” (2025 Form 568 booklet).

Commercial domicile

To be commercially domiciled in California “generally means that this state is the principal place from which the trade or business of the entity is directed or managed” (FTB Pub 1060). If you live in San Diego and run a Wyoming LLC from your kitchen, this test is met on day one.

The sales, property and payroll thresholds

The thresholds rise with inflation each year. Each test is met when the California amount exceeds either the dollar figure or 25% of the LLC’s total, whichever is lower.

Source: FTB, Doing business in California, checked 31 Oct 2026. The page was last updated 11/07/2025 and lists amounts only through 2025, so the 2026 figures were not yet published when we checked. Expect them to be slightly higher.

Two details trip people up:

• The 25% test. FTB’s own example: an out-of-state company with $1,000,000 of total sales, $400,000 of them to California customers, is doing business in California because 40% beats 25%, even though $400,000 is below the dollar threshold (FTB examples).
• Services. FTB says you may have California-source income if you “perform a service to customers who received the benefit of that service in California” (FTB LLC page). A consultancy with mostly California clients should count those sales.

Below the thresholds is not a safe harbor

FTB states that a business with less than the threshold amounts “can still be doing business” if it actively engages in a transaction in California for profit. Its example: an out-of-state partnership whose employees work from home in California, selling to California customers, is doing business there even though property, payroll and sales are all under the thresholds (FTB examples). One remote employee or contractor in California acting for your LLC deserves a proper look.

Decision table for non-resident founders

Who should not rely on a “likely no”: anyone with a California-based co-founder, manager or contractor, anyone whose California share of sales is near 25%, and anyone who already registered in California. Those cases need a California CPA.

How much it costs: the $800 plus the LLC fee

The $800 is a flat minimum. If the LLC’s total California income reaches $250,000, it also owes an LLC fee (FTB):

Amounts as of October 2026. For the fee, “total income” means gross income plus cost of goods sold attributable to California, assigned using California’s sales-sourcing rules (2025 Form 568 booklet). It is a gross figure, so an LLC can owe the fee in a year it makes no profit.

Worked example

A single-member Wyoming LLC owned by a founder in Melbourne sells software subscriptions. In 2025 it had $900,000 of total sales, $280,000 of them to California customers, no property and no payroll anywhere in California.

• Sales test: 25% of $900,000 is $225,000. That is lower than $757,070, so it is the bar. $280,000 exceeds $225,000, so the LLC is doing business in California.
• Annual tax: $800.
• LLC fee: total California income of about $280,000 falls in the $250,000 to $499,999 tier: $900.
• Total to California for 2025: $800 + $900 = $1,700, before any income tax on the owner.

If California sales had been $200,000 instead, 200,000 ÷ 900,000 = 22%, under both tests, and (with no people or management in California) the answer would likely be no. Plug your own numbers into the checker.

Due dates

For a calendar-year LLC in 2026 (FTB 3522, FTB 3536, Form 568 booklet):

When a due date falls on a weekend or holiday, it moves to the next business day. In the first year, the $800 is due by the 15th day of the 4th month after the LLC files with the Secretary of State (FTB). For a foreign LLC whose 4th-month date has already passed when it starts doing business in California or registers, FTB says to pay “immediately after commencing business or registering” (FTB 3522).

The first-year exemption you may have read about is gone: it only covered tax years beginning on or after January 1, 2021 and before January 1, 2024 (FTB).

Registering a foreign LLC in California

An LLC formed elsewhere must register with the Secretary of State before entering into intrastate business in California (Form 568 booklet). That is Form LLC-5, with a $70 filing fee and a current certificate of good standing from the home state (SOS LLC-5). Once registered, the LLC owes the $800 every year until it cancels, and must keep filing its Statement of Information, which carries a $250 penalty if missed (FTB).

If you are not doing business in California, do not register just to be safe: registration itself creates the $800 bill.

Penalties

Interest runs on top. The bigger risk is legal: if an LLC does not file or pay, a foreign LLC’s powers, rights and privileges in California can be forfeited, and contracts it signs during forfeiture are voidable at the other party’s request (568 booklet).

What if you are not doing business in California?

A single-member, unregistered foreign LLC that is disregarded for tax and not doing business in California “need not file Form 565 or Form 568.” A multi-member LLC in the same position that still has California-source income files Form 565, the partnership return, instead (568 booklet). Neither owes the $800.

That is the common case for founders who set up a US LLC from abroad, covered in our guides to a US LLC for non-residents, US LLCs for Canadians and US companies for Australian founders. Your federal filings, such as Form 5472 for a foreign-owned LLC, apply either way.

The home-state trap

The most expensive mistake runs the other way. A founder who lives in California and forms in Wyoming or Delaware to save money still pays California’s $800, because a member conducting business in California makes the LLC “doing business” there. They then pay two states’ fees and two registered agents. Our Delaware vs Wyoming comparison prices that out. If you are moving to California, plan for the $800 from the year you arrive.

Quick checklist

• Not registered in California, nobody working for the LLC there, not managed from there, California sales well under 25% of the total: likely no $800.
• Any one of those changes: run the California $800 LLC Tax Checker and talk to a California CPA before April 15.
• Over $250,000 of California income: budget for the LLC fee and estimate it by June 15.

More guides on forming and running a US entity from abroad are in the US company setup hub.