In this text, you will find answers to the following questions; what is franchise tax, who has to pay it, and how to calculate franchise tax.
What is Franchise Tax?
The franchise tax is a levy paid by certain enterprises that want to do business in some states. Some entities are exempt from franchise taxes including fraternal organizations, nonprofits, and some limited liability corporations.
Do I Have to Pay Franchise Tax?
Considering you have successfully incorporated your business; fresh tax liabilities will be introduced to you as you have a new taxpayer status. The franchise tax is a flat rated and obligatory tax, regardless of your company type. Along with the state of Delaware, numerous states have been imposing income tax on companies. Following your incorporation processes, your company will be liable for a flat rated franchise tax, annually.