All businesses incorporated in or eligible to do business in California are required to pay the California franchise tax annually. Taxes start at $800 per year and can increase based on the business's gross section 143-1 income tax. Paid by all established businesses: C corporations, S corporations, LLCs, and limited partnerships, whether the business is dormant or active, must be paid. Whether your business continues to be profitable or loss-making, California LLCs also levy additional gross income tax on income over $250,000 as long as the income is sourced from the state of California. It's a progressive scale tax that starts at $900 a year and goes over $12,000 a year. This sliding scale tax is over $800 per year.