Form 3522: California Annual LLC Fee - Only What You Need to Know!

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If you are wondering what Form 3522 is, you are on the right page…

Every LLC that is doing business in California is subject to an $800 annual tax. 

A new LLC formed in California has 4 months from the formation date to pay the tax. To avoid possible late fees, I’d recommend checking with me to make sure you are taking the right steps in filing Form 3522.

Continue reading on what FTB Form 3522 is, who needs to file Form 3522, when to file it, and how to file it.

If you have any questions about anything below or need help filing your Form 3522, please feel free to contact me and I will be happy to assist you.

Let’s get started…

 

What is Form 3522?

Form 3522 is a Tax Voucher used to pay the annual LLC tax of $800 for taxable year 2017. 

Every LLC formed or registered to do business in or doing business in the State of California must file Form 3522 with the California Franchise Tax Board every year. 

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In most cases, if you have an LLC in California, you will need to fill out Form 3522. Only if you have gross receipts of $250,000 or over for the year do you have to report a fee on the Form 568 in addition to the $800 annual tax.

Also, if your company has members who are not residents of California, it also must file Form FTB 3832.

A California LLC should use Form 3522 if any of the following apply:

  • The LLC has articles of organization accepted by the California Secretary of State.
  • The LLC has a certificate of registration issued by the California Secretary of State.
  • The LLC is doing business in California.

 

Who Needs Form 3522 & Who Must Pay the Annual LLC Tax?

Every LLC doing business in California or has Articles of Organization filed by the California Secretary of State of State is subject to the $800 annual tax. 

The tax must be paid for each taxable year until a certificate of cancellation of registration is filed with the Secretary of State.

The California Franchise Tax Board makes the distinction between an annual tax and an LLC fee. The annual tax of $800 is included on line 3 of the Form 568, but you also get a credit for that $800 on line 6 of the Form 568. Only if you have gross receipts of $250,000 or over for the year, do you incur the fee also in addition to the annual tax.

 

When to Pay the Annual LLC Tax?

The annual LLC tax is due and payable by the 15th day of the 4th month after the beginning of the LLC’s taxable year (fiscal year) or April 15, 2017 (calendar year).

When the due date falls on a weekend or holiday, the deadline to file and pay without penalty is extended to the next business day. Also, tax returns filed and payments mailed or submitted on April 18, 2017, will be considered timely.

The first taxable year of an LLC begins when the LLC files its Articles of Organization with the Secretary of State. The first taxable year of a foreign LLC doing business in California begins when the LLC is organized in another state.

If the 15th day of the 4th month of an existing foreign LLC’s taxable year has passed before the foreign LLC starts business in California or registers with the SOS, the annual LLC tax should be paid immediately after starting business or registering with the Secretary of State.

For example, if you form an LLC in Delaware on June 1, 2017 and you register your LLC with the California Secretary of State on August 13, 2017 and you begin doing business in California on August 14, 2017, because your LLC’s initial taxable year begins on June 1, 2017, the annual tax is due by September 15, 2017 (the 15th day of the 4th month of the short-period taxable year). The LLC’s short-period (June 1, 2017 to December 31, 2017) tax return is due by April 15, 2018. The annual tax payment for taxable year 2018, with Form FTB 3522, is also due by April 15, 2018.

 

How to Fill Out Form 3522

The 3522 Voucher Form must contain the following information:

  • Term of fiscal year
  • Name of LLC
  • DBA
  • Full address and phone number
  • Secretary of State file number
  • Employer Identification Number (EIN)
  • Amount of payment
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Where to File Form 3522

Make a check or money order payable to the “Franchise Tax Board.” 

Then write the California Secretary of State file number, along with the Employer Identification Number (EIN), and “2017 FTB 3522” on the check or money order. 

Detach the payment voucher from the bottom of the page. Enclose, but do not staple, your payment with the voucher and mail to:

Franchise Tax Board
P.O. Box 942857
Sacramento, CA 94257-0531

Note: If no payment is due or if you make the payment online, you do not need to mail Form 3522.

 

How Can I Make the Payment for Annual LLC Taxes Online?

You can make a immediate payment online using Discover, Visa, American Express, or MasterCard for your Annual California LLC Taxes here.

 

What Happens If I Do Not Pay the LLC Annual Tax?

If you do not make the payment for the LLC annual tax by the 15th day of the 4th month after the beginning of the taxable year, a late payment penalty plus interest will be assessed for failure to pay the annual LLC tax by the due date.

The penalty and interest is calculated from the due date of the tax to the date of payment.

If a prior year LLC tax of $800 was not paid by the 15th day of the 4th month after the beginning of the taxable year, the tax should be paid as soon as possible, using the appropriate taxable year form FTB 3522. 

 

California Form 3522 Extensions: Can I File an Extension for Form 3522?

According to the Franchise Tax Board, your extension to file Form 3522 will depend on your business type.

Corporations are allowed an automatic seven month paperless extension of time to file their returns if:

  • They are in good standing with both Franchise Tax Board and the California Secretary of State on the original due date of the return, and
  • They file their returns on or before the extended due date of the return.

Limited liability companies (LLCs) are allowed an automatic paperless extension for six months from the original due date. The automatic extension does not extend the time to pay.

If the LLC has not paid its LLC fee or non-consenting members tax by the original due date of the return, the partnership should use Payment Voucher for Limited Liability Companies (FTB 3537). 

For more information about extensions, see this page.

 

Need Help Filing Form 3522?

Sam Mollaei, Esq., Business Lawyer

Sam Mollaei, Esq., Business Lawyer

If you need help filing Form 3522 for your California LLC, please contact me Sam Mollaei, Esq., Business Lawyer, at sam@mollaeilaw.com or call 818-925-0002

Mollaei Law is a law firm specializing in business law serving businesses and entrepreneurs. We provide legal expertise in all stages of business development by drafting and reviewing contracts and agreements, assisting transactions and negotiating, forming LLC's and Corporations, registering trademarks and copyrights, business planning, and answering any legal questions you may have about your business.