Yes. California has "like taxes" for all our residence taxes. So if you
have a California corp you pay $800/yr "minimum franchise tax". If you
have an out of state company but do business in California we have a
"Foreign Corp" tax of....guess what.... $800/yr minimum.

Its just like sales tax. If you buy something in California you pay
about 8% sales tax. If you buy it out of state but bring it to
California you pay about 8% "use tax".

They'll get you either way. There are lots of stories of people setting
up corps in California and then not using them for anything. At some
point the state finds out about them and goes after them for $800/yr
plus interest/penalities/etc. Even though the corp never actually did
business in California.

BTW: All this applies the same for LLCs and the old fashion, never used
anymore, s-corps.

-Robert