• A franchise tax is a fee paid by certain businesses that want to do business in certain states. Contrary to what the name implies, a franchise tax is not a franchise tax.

  • Certain organizations are exempt from franchise tax, including fraternal organizations, non-profit organizations, and some limited liability corporations.
  • Franchise taxes are in addition to federal and state income taxes.
  • The amount of franchise tax can vary greatly depending on the tax rules in each state and is not calculated on the profit of the organization.
  • Kansas, Missouri, Pennsylvania and West Virginia have eliminated taxes on corporate franchises.