There's a lot of talk, at least from the right, about California being "hostile" to business. I've been thinking of converting my little consulting business into a one-person
LLC. Some investigation revealed that there would be a
minimum $800 per year tax on the LLC. It goes up as you make more money. This is
in addition to the normal state income tax. Seems a bit steep. If a "typical" small business is making maybe $50000 a year, that's an effective 1.6% tax rate. What do other states charge? Yesterday I was at the local library browsing the NOLO book
Form Your own LLC. Only 11 states (including California) charge
any special yearly LLC tax at all. Here is the complete list. A value of "yes" means that the exact number varies and was not in the book, a "+" means "or more".
| Alaska | $50 |
| Arkansas | $150+ |
| California | $800+ |
| Delaware | yes |
| Illinois | $250 |
| Kansas | yes |
| Massachusetts | $500 |
| New Hampshire | $100 |
| North Carolina | $200 |
| Pennsylvania | $380+ |
| Wyoming | $50+ |
| Alaska | $50 |
As you can see, not only is California somewhat unusual in charging a yearly tax at all, it's tax is the highest.
