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Author: ptheland Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: Re: File S-Corp Return? Date: 1/4/2008 7:05 PM
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Doesn't CA levy a minimum tax on corps whether or not there is any activity?

Yep. $800 per year. And the $800 also applies to LLCs and limited partnerships as well.

The good news for the OP is that the minimum tax is not applied to the first year of a corporation. (But it does apply to the first year of an LLC or an LP.)

And to confuse matters a bit further, for corporations the $800 is a minimum tax. S corps are taxed at 1.5% of net income, C corps at 9.3%. So you pay the larger of the two - the percentage or $800.

LPs pay the $800 and they're done.

LLCs get a gross receipts fee in addition to the $800. That starts with a $900 fee when gross receipts hit $250k, and tops out at a $11,790 fee for gross receipts in excess of $5 million.

So there's a significant cost to using an entity to limit your liabilities in CA.

--Peter
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