Thanks! Your answer provided some pointers, leading me to explore more at FTB as follows.
Another document at FTB site clarifies that LLC is a "disregarded entity" for tax purposes unless the LLC has elected to be taxed as a corporation at the federal
level. So, as my Delaware LLC is being taxed as a sole proprietorship (profits fall through as personal income
through Scedule C), the Franchise Tax would not be due. I have not filed any forms
yet to elect treatment of the LLC as a S or C Corp. Plese refer link below and the quoted text:
Neither California nor federal law classifies LLCs as corporations or as partnerships
taxation purposes. However, federal "check-the-box" regulations
, incorporated by
California for income
and taxable years commencing on or after January 1, 1997, allow
an LLC to elect classification as a corporation, partnership, or sole proprietorship, for federal and California tax purposes unless the entity meets certain specifications
requiring classification as a corporation. (See Rev. & Tax. Code, § 23038; Cal. Code.
Regs., tit. 18, §§ 23038(b)-1 through (b)-3.) Classification of an LLC for California
franchise or income tax purposes depends on the LLC's federal classification as a
corporation, partnership, or "disregarded entity." The classification elected for federal tax
purposes is the same for California tax purposes. (See Rev. & Tax. Code, § 23038; Cal.
Code. Regs., tit. 18, §§ 23038(b)-1 through (b)-3.)
An LLC with a single owner may (1) elect to be classified as an association taxable as a
corporation, or (2) elect to disregard its status as an entity separate from its owner, treat
its activities as a sole proprietorship, branch, or division of the owner, and have its
activities included in the tax return
filed by the owner. (See Cal. Code. Reg., tit. 18,
So, it seems no Franchise tax would be due for a foreign LLC (or any LLC) operating in CA unless it has elected to be treated as a S or C CORP (by filing IRS
forms 2553 or 8832 respectively). Sounds correct ?