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Posted by Katie on April 8, 2008, 8:02 pm
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> Tax issue - please help
>
> We have a C Corp set up in California which is not doing well.
>
> I understand that there is a min $800 fee to operate a C Corp in CA
> whether we have any revenue or not.
>
> Can anyone pls let me know if this is correct.
> If so, what form ( form no. please) do I have to use to pay this
> $800 ?
> What is the deadline ? April 15th ?
>
> Any help would be highly appreciated.
>
> Thanks,
> Anna Reshma
>
A corporation that is organized or qualified to do business, or
actually doing business, in California must pay an annual fixed-dollar
minimum tax of $800. There is no minimum tax for the first year of
the corporation's existence if it was organized on or after January 1,
2000. After the first year, the $800 must be paid on or before April
15 of the taxable year in order to avoid penalty for underpayment of
estimated taxes.
A C corporation files Form 100 to report its income and expenses and
calculate its tax liability. For example, a calendar year
corporation, for which 2007 was not the first year of existence and
which had no activity during the year, would file a 2007 Form 100
reporting no income or expenses and the $800 minimum tax, claiming
credit for the $800 payment that was made on or before April 15,
2007. If the payment was not made by that date, a penalty for
underpayment of estimated taxes (essentially an interest charge
running from the date the payment was due to the due date of the
return or the date of payment, whichever is earlier) will be assessed.
Form 100 is due March 15. For a calendar year corporation, the 2007
return was due March 15, 2008, but can be automatically extended to
October 15, 2008. However, the tax liability must have been paid by
March 15. If the $800 minimum for 2007 has not been paid, it should
be paid as soon as possible and transmitted to the FTB with Form FTB
3539. A late payment penalty (5% per month, maximum 25%) will be
imposed, in addition to interest from March 15 to the date of payment.
If no returns are filed and/or the minimum tax is not paid each year,
eventually the corporation's existence or qualification to do business
in California will be suspended by the Secretary of State. You can
check the current status of a corporation at the SOS web site. A
suspended corporation has no power to do anything other than to change
its name or apply for tax-exempt status. In addition, any contract
entered into in California by a suspended corporation is voidable at
the instance of any other party.
Katie in San Diego
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