Do California corporations have to pay $800?

California, the state, has introduced a new tax requirement for companies that do business in its territory, and the tax must be paid every year. This minimum $800 tax has ever wondered the people around whether it is merely enough to cover all corporations or big companies only. Here's a look at the details:

 

Did you stop to wonder - what is the $800 California business tax?

 

The CA Assembly passed a budget in June, which included a new business entity tax of $800 for all the corporations registered in California. Such tax is applicable to all businesses that are incorporated in California and those entities that do business in California regardless of their presence in this state.

 

Before this, the California state government taxed corporations by a $800 minimum tax up to $11,790 which was the amount according to their total income. This lowers the rate for the lowest income bracket to $800 from the previous rate of 10 percent.

 

Whose money must be paid to fill up the $800 tax charge?

 

Only for the corporations registered in California, including the multinationals and the domestic corporations, the $800 minimum tax applies, no matter which state or country it is. This group is made up of both conglomerates and non-profits. In the case of limited liability companies (LLCs) and partnerships, the exemption is applied.

 

The only exception is that the companies have withdrawn their right to do business in the State or they have been formally surrendered their active/registered statuses with the California Secretary of State. The specific article of the corporation can continue to be active, even if the company fails to generate revenue or launch its operations in the specified state.

 

When is it due?

 

A 12/31 due date coincides with the annual California corporate tax return which amounts to $800. If you are going to use a calendar-year basis, the due date of the return is the 15th day of the 4th month or 15th days after the close of the tax year, or if you are going to use a fiscal-year basis, the due date of the return is the 15th day of the 3rd month after the close of the fiscal year.

 

Consequently, corporate tax of $800 is not just applicable to a majority of the incorporated entities that are registered, but it is also applicable to the authorized ones to do business in the state annually, generally. Corporations will have to account and set for this new additional charge which if they do not formally leave the state.