Franchise tax

A franchise tax is a government levy (tax) charged by some US states to certain business organizations such as corporations and partnerships with a nexus in the state. A franchise tax is not based on income. Rather, the typical franchise tax calculation is based on the net worth of capital held by the entity. The franchise tax effectively charges corporations for the privilege of doing business in the state.[1][2]

  1. ^ "Franchise Tax" (PDF). Iowa Legislative Fiscal Bureau. October 28, 1994.
  2. ^ "Corporate Franchise Tax Vs. Income Tax". smallbusiness.chron.com.