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Tag: Franchise tax
Enterprise Zone Hiring Credit Revival: Relevant for 2025?
Introduction For years, California’s Enterprise Zone Hiring Credit helped businesses reduce state tax by hiring from targeted groups. Although the program expired in 2014, talk of revival bills and local variants in 2025 is back on the table. This guide explores the current status of the credit, proposed changes, and how startup founders and employers […]
Payroll R&D Credit: Why the CA Program Is Capped
Introduction Startups across the U.S. leverage the federal payroll R&D credit to offset up to $500,000 in employer-side payroll taxes. But what about California? In 2025, California still does not allow R&D credits to offset payroll tax, and its overall research credit program is non-refundable and capped for corporations. This guide explains why CA R&D […]
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 §§ […]
California LLC $800 Franchise Tax 2025: Pay, Postpone, or Waive?
Franchise Tax Basics & Legal Authority Statute. California Revenue & Taxation Code §§ 17941 & 17946 require every LLC “doing business” in the state to pay an $800 annual franchise tax. Federal tie-in. LLCs are classified under IRC §7701 & Reg. §301.7701-3; California respects that classification but imposes its own minimum tax regardless of […]
California vs. Texas: Which State Has the Better Tax System for Businesses? (2025 Edition)
Introduction California and Texas are two of the largest economies in the U.S., but their tax systems couldn’t be more different. If you’re starting or relocating a business in 2025, understanding how each state handles taxation is critical to your bottom line. Key Tax Categories Compared Tax Category California Texas Corporate Tax 8.84% None Franchise […]
California Franchise Tax Explained: How LLCs & Corporations Are Taxed (2025 Edition)
Introduction Whether you’re running a small LLC or a growing corporation in California, you’ll likely owe franchise tax—a mandatory annual tax for doing business in the state. This guide simplifies how franchise tax works for LLCs, corporations, and S-corporations in 2025 (for the 2024 tax year). What Is the California Franchise Tax? Applicable Code: IRC […]
Why California Has Some of the Highest Taxes in the U.S. (2025 Edition)
Introduction California’s economy is the largest in the nation, but it also comes with one of the highest state tax burdens. From income to sales and property taxes, residents and businesses often ask: Why are taxes so high in California? This blog explains the structural reasons, what you pay in 2025, and how to plan […]
Types of Taxes in California: What Residents & Businesses Must Pay (2025 Guide)
Introduction California has one of the most complex tax structures in the U.S. Residents and businesses are subject to multiple taxes, including income tax, sales tax, and franchise tax. Understanding these obligations is crucial for compliance and tax planning. Overview of California’s Tax System California collects revenue from individuals and businesses through various tax channels: […]