Franchise Tax
A tax charged by some US states for the privilege of doing business or incorporating there.
Franchise tax is not a tax on franchises (like McDonald's), but rather a fee levied by certain US states (such as Delaware, Texas, and California) on corporations and LLCs for the right to exist or do business in that state. It can be a flat fee or based on business income/net worth.
Related terms
Corporate Income Tax
A direct tax imposed by a jurisdiction on the income or capital of corporations or analogous legal entities.
Entity typesEIN (Employer Identification Number)
A unique nine-digit tax identification number issued by the IRS to identify a business entity in the United States.
Tax & feesVAT Registration Threshold
The specific level of taxable turnover at which a business must legally register for Value Added Tax (VAT).
Tax & feesDouble Taxation Treaty (DTT)
An agreement between two countries to prevent the same income from being taxed twice.