Q.What is the minimum franchise tax in California?

A.There has been a great deal of confusion regarding the minimum franchise tax for California domestic corporations. In the past, corporations were required to pay an up-front franchise tax in the amount of either $300.00 or $800.00 when the corporation was formed. For all corporations formed on or after January 1, 2000, the up-front franchise tax has been waived for the first year. After the first year, California domestic corporations will be required to pay a minimum franchise tax of $800, or the rate is 8.84% on net income for corporations that have not elected S- corporation tax statuts, and 1.5% on net income for S corporations.

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