If you are preparing to file paperwork with the California Secretary of State's office to establish a new business entity, please take note! There is a provision in California law that provides newly established business entities (i.e. Corporations, LLCs, LPs and LLPs) relief from the requirement to pay the $800 annual minimum tax.
Under the "Short Tax Year" provision, a business entity is not subject to the annual minimum tax for 2016 if the entity:
- Did not conduct business in the state during the tax year
- The tax year was 15 days or less
For 2016, this means that an entity that submits paperwork and receives a file date of December 16 or before will be responsible for the $800 annual minimum tax payment for the 2016 tax year, while entities that form between December 17-31 will not be subject to the tax debt for 2016.
If your transaction can wait and you would like to avoid the 2016 annual minimum tax obligation, contact a CLAS at 800.952.5696 or email us at email@example.com. One of our friendly skilled Service Representatives would be happy to help you arrange a filing date after December 16, 2016!
To learn more about our full suite of corporate filing and retrieval services, be sure to visit our Corporate Services page.