CEO and Founder of Kruze Consulting
Table of contents
If you are a startup that has employees, rent, or revenue in CA… and you’ve registered to do business in CA then you will need to pay CA Franchise Tax. These taxes have nothing to do with your revenue, income, profitability, or even if you have an office or presence in that state. Also, this is separate from the “tax return’ which is known as the 1120. It’s a tax for the privilege of being a C-Corp.
Probably - if you are a DE C-Corp that has employees, rent or revenue in California, and you’ve registered to do business in California, then you probably owe the CA Franchise tax. And this would be in ADDITION to the Delaware Franchise Tax that you owe the state of Delaware.
CA Franchise tax is due on April 15th of each year, whereby the CURRENT year’s taxes are due. Corporations don’t need to pay for their first year of incorporation. For example, a company incorporated in 2016 would pay their 2017 CA Franchise Taxes no later than April 15th, 2017. Nothing due for 2016. Another example: If you were incorporated in 2015, we would expect to see an $800 payment around 4/15 of each subsequent year, applied to current tax year. In other words:
FTB = Franchise Tax Board
Note that the CA Franchise Tax site does not have an easy login for us to double check on this; therefore, the most efficient thing for us to do is verify payments within your books.
Categories:Startup Taxes State & Local Taxes Venture Capital
Top viewed questions
READY TO CONNECT FOR A FREE CONSULTATION?
We are the experts at helping seed/VC-backed Delaware C-Corps with their accounting and finances!
Talk with a real accountant, not a generic salesperson!
Help us get in touch
Your request has been submitted.
We will contact you shortly.