California Says Business Still Owes LLC Tax, Even if Inactive

A business owes California its annual tax on limited liability corporations even if it didn’t earn any income in the state that year, the California Office of Tax Appeals said in a ruling posted Monday.

The business, A+ Lives LLC, contended that it didn’t need to pay the tax applied by the Franchise Tax Board because it didn’t garner income in 2020. The company also argued the tax shouldn’t apply because 2020 was its first year.

Administrative Law Judge Veronica Long wrote in her precedential opinion that the business filed its articles of organization in 2019, therefore it wasn’t still ...