California Form 100 is the annual corporate franchise or income tax return that C-corporations and certain other entities doing business in or earning income from California file with the Franchise Tax Board (FTB). The tax runs 8.84% of net income, with a minimum franchise tax of $800 per year regardless of profit or loss.1Franchise Tax Board. Business Tax Rates The form covers two situations at once: a franchise tax for the privilege of operating in California, and an income tax for corporations that earn California-sourced income without technically “doing business” in the state.
Who Has to File
Traditional C-corporations incorporated or qualified to do business in California file Form 100 every year, including years with no activity or revenue.2Franchise Tax Board. Corporations LLCs that have elected to be taxed as corporations and business trusts (including Massachusetts trusts) are in the same bucket.3Franchise Tax Board. 2025 Instructions for Form 100 Corporation Tax Booklet If your entity shows up as an active corporation on the Secretary of State’s records, the FTB expects a return.
S-corporations don’t use this form. They file Form 100S and pay at 1.5% on California-source income, though the $800 minimum still applies.4Franchise Tax Board. S Corporations The 100S deadline is one month earlier than Form 100.
When an Out-of-State Corporation Gets Pulled In
A corporation headquartered outside California still owes franchise tax if it meets the state’s “doing business” definition. The statute defines this as actively engaging in any transaction for financial gain within the state, and it sets specific dollar thresholds that create an automatic filing obligation.5California Legislative Information. California Code Revenue and Taxation Code RTC 23101 For 2025, a corporation is considered to be doing business in California if any one of the following is true:
- California sales exceed $757,070, or 25% of total sales (whichever is less)
- California property exceeds $75,707, or 25% of total real and tangible personal property
- California payroll exceeds $75,707, or 25% of total compensation paid
These thresholds are adjusted annually for inflation.6Franchise Tax Board. Doing Business in California A corporation organized or commercially domiciled in California is automatically treated as doing business here regardless of revenue. Remote sellers and service companies with no physical California footprint can land inside the rule once sales cross the threshold.
Tax Rate and the $800 Minimum
Corporations other than banks and financial institutions pay franchise tax at 8.84% on net income.7California Legislative Information. California Code RTC 23151 If 8.84% of net income comes out below $800, you still owe $800. The minimum applies every year the corporation exists, whether you’re profitable, losing money, or completely dormant.8California Legislative Information. California Code Revenue and Taxation Code RTC 23153
One important exception: newly incorporated or newly qualified corporations owe no minimum franchise tax for their first taxable year.2Franchise Tax Board. Corporations After that, the $800 keeps accruing until the corporation formally dissolves, surrenders, or cancels. Forgetting to shut down a dormant corporation is one of the most common sources of unexpected California tax debt.
What Goes on the Return
Form 100 starts with federal taxable income from Federal Form 1120, then layers on California-specific adjustments. Before you begin you’ll need your California Corporation Number from the Secretary of State and your Federal Employer Identification Number. Adjustments reflect the places California diverges from federal law, including depreciation methods, tax-exempt interest treatment, and the state’s conformity date to the Internal Revenue Code.3Franchise Tax Board. 2025 Instructions for Form 100 Corporation Tax Booklet
Apportionment
Corporations earning income both inside and outside California don’t pay tax on worldwide income. They apportion business income to California using a formula. Most corporations use a single-sales-factor formula, so only the ratio of California sales to total sales determines how much income California can tax.9Franchise Tax Board. Apportionment and Allocation of Income The exceptions are corporations that get more than 50% of gross receipts from agricultural or extractive activities, which continue using a three-factor formula weighing property, payroll, and sales for tax years beginning on or after January 1, 2025. Banking, financial institutions, and savings and loan companies moved to the single-sales-factor formula for tax years beginning in 2025. The calculation is reported on Schedule R, filed with Form 100.
Net Operating Loss Suspension
California has suspended the net operating loss deduction for tax years 2024 through 2026. During the suspension, corporations with $1 million or more in California taxable income cannot claim NOL deductions, though they can keep computing and carrying over losses for future use.10Franchise Tax Board. Net Operating Loss Corporations with income below $1 million are exempt from the suspension and can still deduct NOLs normally. The carryforward period extends by one year for each year the deduction is suspended, so no losses are permanently lost. California does not currently allow NOL carrybacks.
Estimated Tax Payments During the Year
Corporations doing business in California, active or inactive, must make estimated payments during the year. California uses a different installment schedule than the federal government: payments are due on the 15th day of the 4th, 6th, 9th, and 12th months of the taxable year, split 30%, 40%, 0%, and 30% of the estimated annual liability.11Franchise Tax Board. 2025 Instructions for Form 100-ES Corporation Estimated Tax The zero in the third quarter catches first-time filers expecting four even payments.
Corporations that make estimated or extension payments exceeding $20,000, or that have a total tax liability over $80,000, must remit all payments electronically through EFT. Once you cross either threshold, every future payment has to be electronic regardless of amount, or you face a 10% non-compliance penalty. California also does not follow the federal safe harbor that lets you base estimated payments on prior-year tax. The underpayment penalty is calculated against current-year tax only.
Deadline and Extension
Form 100 is due on the 15th day of the fourth month after the close of the corporation’s taxable year. For calendar-year filers, that’s April 15.12Franchise Tax Board. FTB 3586 Payment Voucher for Corporations and Exempt Organizations e-filed Returns California grants an automatic seven-month extension to file, moving the deadline to November 15 for calendar-year corporations.13Franchise Tax Board. Extension to File No application is required, as long as the corporation isn’t suspended.
The extension covers filing, not payment. All tax owed is still due on the original date. If you owe and need more time to file, use Form FTB 3539 to submit the extension payment.2Franchise Tax Board. Corporations If nothing is due, no extension form is needed.
Penalties for Filing or Paying Late
Missing the filing deadline triggers a penalty of 5% of unpaid tax for each month or partial month the return is late, up to 25%.14California Legislative Information. California Code RTC 19131 The clock starts on the original due date, not the extended date, so filing under extension while paying late still generates penalties.
A separate late payment penalty applies when tax isn’t paid by the deadline: 5% of the total unpaid tax, plus 0.5% per month on the remaining balance for up to 40 months, also capped at 25%.15California Legislative Information. California Code RTC 19132 Both penalties can run at the same time if you file late and pay late, and interest accrues daily on any outstanding balance from the original due date. A corporation that ignores a $10,000 liability for a year can easily face $2,500 or more in penalties before interest.
Stopping the $800 Clock
The $800 minimum keeps accruing every year the corporation exists on the Secretary of State’s records, even if you stopped operating years ago. To end the obligation, the corporation must formally dissolve (if incorporated in California) or surrender or cancel its registration (if a foreign corporation qualified here).16Franchise Tax Board. FTB Publication 1038 Guide to Dissolve, Surrender, or Cancel
To avoid the minimum tax for the current and future years, three conditions all have to be met: file the final tax return on time (including any extension), stop all business activity in California after the last day of the preceding taxable year, and file the dissolution or surrender documents with the Secretary of State within 12 months of the final return’s filing date. Miss any one, and the $800 keeps adding up.