Why incorporate in California?

Business Information & Rankings

• California ranked 1st as the Most Popular State to Live in (Harris Poll, 2003)
• California ranked 4th as the most expensive State in which to do business (Cost-of-Doing-Business Index, Milken Institute, 2005)
• Riverside-San Bernardino ranked 2nd as the Best Large U.S. City to Do Business (Inc., 2005)

Cost of Living Index

Crime Rate

California is ranked 27th in crime. (FBI, 2004)

Fees & Taxes

Business Inventory Tax
California does not tax business inventory.

Corporate Franchise Tax
Corporations are subject to an annual $800 minimum franchise tax if it is doing business in the state, whether the corporation is active, inactive, operating at a loss, or filing a short period return for less than 12 months.

Corporate Income Tax
The General Corporation rate is 8.84%. Banks and financial corporations, excepting financial S corporations, are subject to a 10.84% tax rate. A 3.5% tax rate applies to financial S corporations, and a 1.5% rate applies to all other S corporations.

Personal Income Tax
Rates vary and start at 1% for the first $12,924 and go up to9.3% for income over $80,692.

Personal Property Tax
In California, all real property is taxable and is assessed at fair market value.

State Sales and Use Tax
Base Rate: 6.25 %
Machinery Rate: None

Exemptions apply for purchases of qualified manufacturing equipment and research property for use during the first three years of business by manufacturers commencing business in California.

Unemployment Insurance
California’s new employers’ tax rate is 3.4% for 3 years.