States that Charge a Franchise Tax

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What states charge a franchise tax?
As of 2019 the states with a type of franchise tax were: Alabama, Arkansas, California, Delaware, Georgia, Illinois, Louisiana, Mississippi, New York, North Carolina, Oklahoma, Tennessee and Texas. Washington D.C. also has a franchise tax.
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A franchise tax is a type of state tax levied against companies that have been incorporated or granted permission to operate in that state. It is a tax on the privilege of conducting business in the state rather than a tax on earnings. The tax burden is often determined by the company’s capital or net value.

Franchise taxes are now levied in 16 states. These states are North Carolina, Oklahoma, Pennsylvania, Tennessee, Texas, Virginia, and West Virginia, as well as Alabama, Arkansas, Delaware, Georgia, Illinois, Louisiana, Mississippi, Missouri, Nebraska, North Dakota, Oklahoma, and West Virginia.

While it may be referred to as a corporate income tax in some areas, the franchise tax is actually a different tax in others. Each state has a different tax rate and tax calculation process.

One state that levies a franchise tax is Louisiana. The tax is yearly and determined by the company’s net worth. For companies, the tax rate is 0.3%; for partnerships and LLCs, it is 0.1%. The minimal amount of tax is $10.

St. Tammany Parish in Louisiana additionally levies a sales tax in this regard. In St. Tammany Parish, the current sales tax rate is 9.75%. This entails a 4.45% state sales tax rate, a 4% parish sales tax rate, and a 1.3% municipal sales tax rate.

In addition to the sales tax, there is a food tax in Jefferson Parish, Louisiana. The food tax is one percent. This tax is levied on the purchase of prepared foods and drinks, including meals at cafes, restaurants, and other eating places.

In order to properly budget and plan for their financial obligations, business owners should be informed of the franchise tax and other taxes that can apply to their industry. It’s crucial to seek advice from a tax expert for compliance and tax planning methods.