Franchise Taxes in the United States
To provide general information on franchise taxes in the United States and a breakdown of information state-wise in order to create blogs to guide business owners.
Franchise Tax in the US
The franchise tax is levied by the state government in the United States against the corporations, partnerships, and other types of business entities for the privilege of conducting business in that state.
Who should pay this tax?
The franchise tax is charged on any business that is registered with a state to "do business" including corporations, partnerships, and limited liability companies (LLC). The franchise taxes are not normally subjected to sole proprietorship businesses in states where they are not officially required to register with the jurisdiction to do their business.
What states levy this tax?
In the United States, the franchise tax is applicable in 15 states namely, West Virginia, Illinois, Pennsylvania, Alabama, Missouri, Oklahoma, Arkansas, Georgia, Mississippi, New York, Tennessee, Delaware, Texas, Louisiana, and North Carolina.
How the franchise tax is calculated?
The calculation of franchise tax varies depending on the state that is charging. The methods include but not limited to:
How it is different from business income tax?
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