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Tag: AI Startup Taxes
Delaware Series LLC? Why California Charges a “Doing Business” Fee Anyway (2025)
Why Your Delaware Series LLC Still Owes California Money State Nexus Rule. California imposes its annual $800 franchise tax on every entity “doing business” in the state or registered with the Secretary of State—no matter where it was created (R&TC § 17941, § 23101). Series Treated Separately. The Franchise Tax Board (FTB) treats each protected […]
Paying the CA PTET Voucher: Exact Form 3893 Walk-Through for 2025
Legal & Technical Authority State Law: California Revenue & Taxation Code §§ 19900-19906 (AB 150, SB 113) require two pass-through entity elective tax (PTET) payments—one during the tax year and one with the return. Federal Context: PTET shifts the state tax to entity level, making it deductible under IRC § 162 and sidestepping the SALT […]
S-Corp vs. LLC in California — Franchise Tax and PTET Compared for 2025
Statutory Snapshot LLC: California Revenue & Taxation Code (R&TC) §§ 17941 ($800 annual tax) and 17942 (gross-receipts fee). Federal entity classification follows IRC § 7701 and Reg. § 301.7701-3. S-Corp: R&TC § 23802 imposes a 1.5 percent tax on net income (minimum $800). Federal rules are in IRC §§ 1361–1362. PTET (either entity): R&TC §§ […]
C-Corp Flat 8.84 % Tax: Still Worth It for Venture-Backed AI Start-Ups in 2025?
Statutory Authority & Basics Law. California taxes C-corporations at a flat 8.84 percent on net income (10.84 percent for banks/financials) under R&TC § 23151, applied on Form 100. Minimum Franchise Tax. Every C-corp also owes $800 each year, due with the first quarter estimate—even if inactive or loss-making. Federal Overlay. C-corps pay IRC § 11 […]
Alternative Minimum Tax (AMT) on California C-Corps Explained for 2025
Legal Foundation Statute: California Revenue & Taxation Code (R&TC) § 23455 adopts the federal AMT regime (IRC § 55) with state-specific rates and adjustments. Rate: 6.65 percent of California alternative minimum taxable income (AMTI) after the state exemption; 8.65 percent for banks and financial corporations. Exemption: First $40,000 of AMTI is exempt; the exemption is […]
LLC Gross-Receipts Fee Tiers: How Much Will Your SaaS Pay in 2025?
Statutory Authority & Who Pays California imposes a gross-receipts (“LLC”) fee—separate from the $800 franchise tax—under R&TC § 17942. Any LLC “doing business” or registered in California must pay the fee if its total California income (apportioned or sourced) meets the thresholds below, regardless of profit or loss. Federal entity classification under IRC § 7701 […]