New California LLCs pay $400 instead of $800 in annual tax for their first year
Limited liability companies doing business in California pay a $400 annual tax for their first taxable year instead of $800, for taxable years that begin over a three-year span. The law also extends the CalCompetes jobs tax credit by five years.
Who it affects
New limited liability companies doing business in California
When
This law took effect on July 13, 2026, but the changes described here start on January 1, 2027.
- : Signed into law; Law took effect
- : The changes described here start to apply
- : The lower first-year LLC tax ends for new taxable years
Official text
California SB 180: Taxation trailer bill.
On California Legislative Information. The official text is what counts; read it before you act.
Not legal advice. Plain-English summaries to help you find what changes and when. Not legal advice: read the official text, and ask a lawyer about your situation.