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Old 11-09-2010, 04:26 PM
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Does California impose a Minimum Franchise Tax on 2 Member LLC's?

As a matter of fact, "California does tax LLCs with a minimum franchise tax of $800 per year." The $800 annual tax applies to all LLCs, LPs, LLPs, and REMICs, if any of the following apply to the entity:

• It is doing business in California.

• It is registered in California.

• It is organized in California.

Also, it is worth noting that California State imposes a "Failure to Pay Total Tax by Due Date".

For LPs, LLPs, and REMICs that must pay the $800 annual tax with Form 565, a penalty for late payment of tax may be assessed. Any LP, LLP, or REMIC that fails to pay the $800 annual tax by the original due date is assessed a penalty of 5% of the unpaid tax, plus 0.5% for each month or part of a month (not to exceed 40 months) the tax remains unpaid. This penalty cannot exceed 25% of the unpaid tax. Interest will be due and payable on the late payment.

Furthermore, "Interest is due and payable on any tax due if not paid by the original due date. Interest is also due on some penalties. The automatic extension of time to file does not stop interest from accruing. California follows federal rules for the calculation of interest."

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