Yes, Californians, you have to register your non-CA LLC with CA.

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Yes, Californians, you have to register your non-CA LLC with CA.

Logan AllecBusiness Member
Accountant · Los Angeles, CA · Member since 2014 · 1k+ posts · 980 votes

I've seen this question asked almost daily on the boards: "I'm a California resident with an LLC formed in Ohio / Indiana / [insert-turnkey-haven-here] that holds my properties in that state.  Do I have to register my LLC with the California Secretary of State and file a California tax return and pay the $800 LLC Tax every year?"

The answer is almost always YES since California considers the LLC as "doing business in California" and therefore required to do all the things mentioned in the first paragraph above if you, as a member of the LLC, do anything on the LLC's behalf while you are in California.  Below are two excerpts from  that I'm pretty sure indicts the whole lot of you!

I hope this clarifies the issue.  Feel free to reach out with any questions.

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Chris E.
Investor · FL · Member since 2015 · 202 posts · 34 votes
10y

according to the CA franchise tax board, if you make a phone call to your property manager or send an email while sitting in california, you are doing business in the state and have to pay the $800. we all know it doesn't make sense but this is CA.

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  • Steven Hamilton IIPro Member
    Accountant, Enrolled Agent · Grayslake, IL · Member since 2011 · 5k+ posts · 2k+ votes
    10y
    Great post Logan, I too get this question daily.


    Originally posted by @Logan Allec:

    I've seen this question asked almost daily on the boards: "I'm a California resident with an LLC formed in Ohio / Indiana / [insert-turnkey-haven-here] that holds my properties in that state.  Do I have to register my LLC with the California Secretary of State and file a California tax return and pay the $800 LLC Tax every year?"

    The answer is almost always YES since California considers the LLC as "doing business in California" and therefore required to do all the things mentioned in the first paragraph above if you, as a member of the LLC, do anything on the LLC's behalf while you are in California.  Below are two excerpts from  that I'm pretty sure indicts the whole lot of you!

    I hope this clarifies the issue.  Feel free to reach out with any questions.

    [email protected]224-381-2660
    0Reply
  • Chet Mazur
    Flipper · Cupertino, CA · Member since 2015 · 265 posts · 27 votes
    10y

    It's my understand if don't bring profit back into CA, do don't have to pay. IMHO 800 isn't the bigger deal, it's the LLC tax.

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  • Logan AllecBusiness Member
    OP
    Accountant · Los Angeles, CA · Member since 2014 · 1k+ posts · 980 votes
    10y

    @Chet Mazur, the $800 is the LLC Tax.  I think what you're referring to is the LLC Fee, which is based on California gross receipts. If you don't have gross receipts sourced to California, or they are less than $250,000 in a given year, then you don't have to pay the LLC Fee for that year--I think this is what you mean when you say you "don't have to pay" if there is no California activity--but all LLCs registered with the California Secretary of State have to file Form 568 and pay the $800 LLC Tax.

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  • Chet Mazur
    Flipper · Cupertino, CA · Member since 2015 · 265 posts · 27 votes
    10y

    Isn't that the point? If it is a DE llc that owns property in TX, and is owned by a CA investor, but the investor never brings the proceeds (nor manages, nor writes checks...) of the LLC back into CA. The $$$ sits in a DE bank waiting for the next investment.

    The LLC is not doing business in CA, doesn't need to pay $800 nor LLC tax. It's been a while so I may not be remembering correctly.

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  • Chris E.
    Investor · FL · Member since 2015 · 202 posts · 34 votes
    10y

    according to the CA franchise tax board, if you make a phone call to your property manager or send an email while sitting in california, you are doing business in the state and have to pay the $800. we all know it doesn't make sense but this is CA.

    2Reply
  • Logan AllecBusiness Member
    OP
    Accountant · Los Angeles, CA · Member since 2014 · 1k+ posts · 980 votes
    10y

    Exactly, @Chris E.

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  • Andy Terbovich
    Member since 2018 · 2 posts · 1 vote
    8y

    Hey @Logan Allec,

    I know this is an old post, but I'd love some clarification on one thing. I was under the impression that a CA resident with out of state properties and LLCs did NOT need to actually register the LLC with the CA Secretary of State, but only need to pay an $800 tax on these LLCs.

    Specifically, I'm asking about multi-member LLCs that are classified as a partnership. Furthermore, they are owned by husband and wife investors.

    This is from the CA SOS website:

    Since we're not doing any intrastate business within CA, do we still need to register the LLC with the CA SOS by filing an Application to Register (Form LLC-5), or can we just pay the $800 franchise tax by filing Form 568?

    Or, is it a Catch-22 because we need to be registered in CA prior to filing Form 568?

    BTW, I am not disputing that we need to pay the $800 minimum tax. I know CA too well to think I'd get away without paying taxes.

    Thanks!

    1Reply
  • Denise Roman
    Accountant · Santa Fe Springs, CA · Member since 2018 · 8 posts · 1 vote
    7y

    Thank you - this certainly clears things up for me.

    0Reply
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