A client owns several single owner LLCs in California. He now wants to establish a Nevada LLC that owns each of these individual California LLCs. The Nevada LLC will also be a single owner. The question is does the Nevada LLC owe California taxes if the individual LLCs have paid their California taxes and LLC fees?
It will be considered to be doing business in CA because of its ownership interest in the CA LLCs. It must file a Form 568 and pay the $800 annual tax. If its only income is from the CA LLCs then it won’t have to pay the fee, as those LLCs were already subject to the fee. See our article “Computing the LLC fee for tiered LLCs” in the February 2019 issue of the California Taxletter: