A Califordable Plan to Stop Penalizing Family Businesses and Entrepreneurs

The Problem

California charges small businesses $800 per year just to exist, even if they make no money.

A startup testing an idea. A family business in a slow year. A contractor trying to go independent. All owe the state $800 regardless of profit or revenue.

In most states, you do not owe major business taxes if you made no money. In California, Democrats impose a minimum tax even when a business earns nothing.

The national average annual LLC fee is under $100. California charges $800, making it one of the highest minimum business taxes in the country.

This raises the cost of starting a business and discourages people from taking the risk of building something new.

Why This Hurts Small and Family Businesses

For large corporations, $800 is trivial. For a small or family-run business, it is not.

This tax forces entrepreneurs to pay the state before they make their first sale. It punishes businesses in lean years. And it makes it more expensive to try, fail, adjust, and try again.

Because the tax applies even when profits are zero or negative, it hits startups, sole proprietors, home-based businesses, and side businesses hardest. The people least able to absorb the cost are the ones forced to pay it.

Small businesses are already being squeezed from every direction. Because California Democrats failed to repay the state’s pandemic unemployment debt, employers here are now paying sharply higher federal FUTA taxes than businesses in most other states. That means higher per-employee costs through no fault of their own. Against that backdrop, charging small businesses $800 just to exist is especially punishing.

Instead of encouraging entrepreneurship, Democrats have built a system that treats small businesses as a guaranteed revenue source.

Where the Money Goes

The $800 LLC tax goes into the state’s general fund, not back to small businesses.

Small businesses pay the bill, but they do not see lower costs, simpler rules, or targeted relief in return.

The problem is not small business owners. The problem is Democrats using them as a revenue stream.

Steve Hilton’s Plan to Fix It

Democrats built a system that taxes small businesses whether they succeed or fail. Steve Hilton will end it.

As governor, he will eliminate California’s $800 minimum LLC tax so businesses are no longer charged simply for existing.

Businesses will still pay taxes when they make money. But if a business earns no profit, it should owe no tax.

This reform will lower the cost of starting a business, reduce pressure on family-owned companies, and remove a major barrier to entrepreneurship in California.

Steve Hilton will end the Democrats’ small-business tax and restore a simple rule: you should only pay business taxes if you actually make money.