What's a minimum llc tax?

What you should do

Count on paying this tax every year the LLC is registered in a state that charges it, whether or not the company earns a dollar. A dormant LLC still owes it until you close the company properly, so a slow year saves you nothing.

To make the tax stop, dissolve the LLC through the state and get written confirmation that the charge has ended. Just shutting down the business isn't enough, since the state keeps billing a company that's still on its books.

Where states differ

Here's the list of the 3 states that charge LLCs a minimum tax, each in its own words. If yours is on it, add the amount to your yearly budget now. You owe it even if the company earns nothing. If your state isn't listed, there's no minimum tax.

• California: $800 a year minimum LLC tax to the Franchise Tax Board (Form FTB 3522), separate from the Statement of Information.
• Kentucky: Limited Liability Entity Tax: a $175 minimum each year to the Department of Revenue.
• Rhode Island: $400 a year minimum tax to the Division of Taxation (Form RI-1065), owed whether or not the LLC makes a profit.

Where you'll see it

You'll run into it here: Forming an LLC: every state, Who needs a registered agent, state by state, Registering out of state: every state.