If you have ever registered a business in the State of California as an LLC, you will know that there are annual fees. These fees are $800 per year for just having an LLC in CA (even if you have a loss). Then, you get assessed additional fees based on the amount of sales you make.
However, many taxpayers registering an LLC in CA are not aware that they have a fee that they need to pay each year, even if their business is inactive or even losing money. This may be a surprise. Many owners will declare that they are a Wyoming corporation or Delaware corporation and are not subject to tax. However, if you maintain a facility in CA and otherwise do business there, you will be liable for CA state taxes.
Failure to make these aforementioned payments to the Franchise Tax Board will result in a proposed assessment, even if you did not make sales or earn income.
We also see situations where a taxpayer has been filing their normal federal & state returns, however, they have forgotten to properly file form 568. This causes the business to lose good standing status, leading to various types of emergencies, such as loans or business partnerships disallowed due to not having an entity in good standing.
If you have received a notice from the FTB asking to file form 568 or assessing penalties, we can get this situation resolved for you. Just contact us at the webform below or call (833) 829-1120 and we will assist you 7 days a week.
George Dimov, CPA, is registered with the Franchise Tax Board of California as a tax preparer and holds a CPA license that is recognized in all 50 states, as well as a Federal PTIN.