Franchise taxes are taxes that a business, usually a corporation, must pay in order to conduct business in the state. Franchise tax is separate from income or profit tax, which businesses also have to pay.
Tax laws vary from state to state, and the franchise tax amount a business owes depends on the type of business. Non-profit organizations are usually exempt from franchise taxes, if they are also exempt from federal income taxes. Factors that affect the amount of franchise tax owed include:
- Gross Assets of Business
- Number of Authorized Shares of Corporation
- Value of Property Owned by the Business
Taxation is a very complicated area of the law, and a business attorney can help you manage your business assets in a way that reduces your tax liability. An attorney can also help you with your personal income taxes.