SERVING CALIFORNIA FROM SAN DIEGO TO SACRAMENTO · SINCE 2005
California Bookkeeping Services
Last Updated: October 6, 2026California charges you for existing. Every LLC and corporation doing business in the state owes an $800 annual franchise tax whether it earned a dollar or not, and LLCs crossing $250,000 in California gross receipts owe a second, separate fee on top — $900, then $2,500, $6,000 and $11,790 as revenue climbs. Those are two different payments, on two different deadlines, calculated from two different numbers, and the one that catches people out is the gross-receipts fee: it keys off total receipts, not profit, so a business losing money can still owe $2,500. Add a 7.25% statewide sales-tax floor before any district tax, and the margin for sloppy books is thin. We have kept books for businesses remotely since 2005, and dedicated bookkeepers from $75/month keep every one of those filings tax-ready.
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California owners and their CPAs come to us because the state punishes imprecision — the LLC fee is driven by gross receipts, which means your revenue coding has to be right all year, not reconstructed in March. Dedicated bookkeepers, monthly reconciliations, and tax-ready financials — plans from $75/month, extra hours at $15/hour, and wholesale $10/hour rates for CPA firms — backed by a 100% money-back guarantee on your 1st retainer, refundable on the unused balance.
On This Page
- California’s small-business tax landscape
- The $800 tax and the gross-receipts fee are two different things
- Sales tax: 7.25% is only the floor
- The first-year trap and the cancellation trap
- California cities we serve
- California FAQs
California’s Small-Business Tax Landscape
| Tax / Filing | Rate / Fee | Deadline |
|---|---|---|
| Annual franchise tax (LLC and corporation) | $800 minimum, owed even with no income or activity, until the entity is formally cancelled | 15th day of the 4th month of the tax year — April 15 for calendar-year filers |
| LLC gross-receipts fee | $900 at $250,000–$499,999 · $2,500 at $500,000–$999,999 · $6,000 at $1,000,000–$4,999,999 · $11,790 at $5,000,000+ — based on California total income, not profit | Estimated and paid by the 15th day of the 6th month (Form 3536) |
| Form 568 (LLC return) | Reports the annual tax and the fee | 15th day of the 3rd month after year end for partnership-classified LLCs; extended to the 15th day of the 10th month |
| Corporation franchise tax | 8.84% of net income, subject to the $800 minimum | 15th day of the 4th month after year end |
| Statewide sales and use tax | 7.25% base, before district taxes that push many cities materially higher | Monthly, quarterly or annually, by CDTFA assignment |
| Statement of Information | Filed with the Secretary of State — biennially for LLCs, annually for corporations | In a six-month window keyed to your formation or registration month |
Figures from the California Franchise Tax Board and Secretary of State, checked 3 October 2026. Rates and fees change; confirm current amounts with FTB or your CPA before filing.
The $800 Tax and the Gross-Receipts Fee Are Two Different Things
This is the single most common California bookkeeping error we see, and it is expensive. The $800 annual franchise tax is a flat charge for the privilege of being registered. The LLC fee is an entirely separate amount, on a different form and a different deadline, calculated from California total income — essentially gross receipts sourced to the state.
Because the fee keys off receipts rather than profit, it does not care how your year went. An LLC that turned over $600,000 and lost money still owes $800 plus $2,500. A business that tracks revenue loosely, or books gross receipts net of refunds and platform fees, can land in the wrong bracket in either direction — underpaying and drawing penalties, or overpaying and never noticing.
Getting that right is bookkeeping, not tax advice: it needs revenue recorded gross, sourced correctly, and reconciled every month so the June estimate is based on real numbers rather than a guess. That is what we do.
Sales Tax: 7.25% Is Only the Floor
California’s statewide rate is 7.25%, and almost nobody actually pays 7.25%. District taxes added by counties, cities and special districts stack on top, and they vary street by street — a single delivery address can sit in two or three overlapping districts. For a business shipping within California, the correct rate depends on where the goods go, not where you are.
The bookkeeping consequence is that sales-tax liability cannot be reconstructed from a revenue total. It has to be captured transaction by transaction, with the district component preserved, so the CDTFA return ties to the ledger. We reconcile the tax collected in your system against what was actually remitted, every month, so the return is a report rather than an investigation.
The First-Year Trap and the Cancellation Trap
Two timing problems catch California businesses repeatedly.
At the start: the $800 is due on the 15th day of the fourth month of the tax year — before most new owners have thought about tax at all, and whether or not the business has revenue.
At the end: the $800 keeps accruing until the entity is formally cancelled with the Secretary of State and the FTB. Simply stopping trading does not stop the clock. We have seen owners discover several years of accrued minimum tax on an entity they believed was long closed, usually when they try to open something new.
Neither is a tax-planning question. Both are a question of whether somebody is watching the calendar and keeping the entity’s records straight. Catch-up bookkeeping at $75 per month behind rebuilds the years that were missed.
California Cities We Serve
Dedicated local guide: Los Angeles and San Francisco, San Diego — plus San Diego, San Jose, San Francisco, Fresno, Sacramento and Long Beach, and every corner of the state, all served remotely. Browse all locations.
California Bookkeeping FAQs
Does every California LLC really owe $800?
Yes, in substance. The $800 annual franchise tax applies to every LLC and corporation doing business in or organised in California, regardless of income or activity, and it keeps accruing until the entity is formally cancelled with the Secretary of State and the Franchise Tax Board. There are narrow exemptions, including one for certain deployed military owners and a first-year exemption that has applied to some entities in particular years — check your own position with the FTB or your CPA rather than assuming.
What triggers the extra California LLC fee?
California total income — broadly gross receipts sourced to California — of $250,000 or more. The fee is $900 from $250,000, $2,500 from $500,000, $6,000 from $1,000,000 and $11,790 from $5,000,000. It is calculated on receipts, not profit, so a loss-making business can still owe it, and it is estimated separately on Form 3536 by the 15th day of the sixth month.
Is California sales tax really 7.25%?
7.25% is the statewide base. District taxes added by counties, cities and special districts sit on top, so the rate that actually applies depends on the destination address and is commonly higher. For a seller shipping within California, that means the correct rate varies by order, which is why sales tax has to be captured per transaction rather than calculated from a revenue total at quarter end.
We are behind on our California books. How far back can you go?
As far back as you need. Catch-up bookkeeping is $75 per month behind, covering up to five hours a month, then $15 an hour, with no limit on how many years we rebuild. For California that usually means reconstructing gross receipts properly so the LLC fee bracket can be established for each year, and reconciling sales tax collected against what was remitted.
Do you have offices in California?
No, and we would rather say so plainly than imply otherwise. We are a fully virtual bookkeeping company — founded in Vienna, Virginia on May 25, 2005 and headquartered in San Juan, Puerto Rico today, US-registered with delivery centers in India, which we disclose on our About page. We have served California businesses remotely since 2005. You get a dedicated bookkeeper with plans from $75/month, monthly reconciliations, and a 100% money-back guarantee on your 1st retainer, refundable on the unused balance.
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Dedicated California bookkeeping from $75/month — with a 100% money-back guarantee on your 1st retainer, refundable on the unused balance.