Franchise tax is a tax charged by some US states to corporations formed in those states based on the number of shares they issue or, in some cases, the amount of their assets. The purpose of the tax is to raise revenue for the state. The State of Delaware has a significant franchise tax, while other states, such as Nevada, have none at all, or a smaller one. A U.S. state is any one of the 50 states which have membership of the federation known as the United States of America (USA or U.S.). The separate state governments and the U.S. federal government share sovereignty. ... A corporation is a legal person which, while being composed of natural persons, exists completely separately from them. ... Official language(s) None Capital Dover Largest city Wilmington Area Ranked 49th - Total 2,491 sq mi (6,452 km²) - Width 30 miles (48 km) - Length 100 miles (161 km) - % water 21. ... Official language(s) None Capital Carson City Largest city Las Vegas Area Ranked 7th - Total 110,567 sq mi (286,367 km²) - Width 322 miles (519 km) - Length 490 miles (788 km) - % water 0. ...
For example, a calendar 2006 franchisetax return is based upon assets as of December 31, 2005 or January 1, 2006 and it covers the taxable period from January 1, 2006 to December 31, 2006.
Franchisetax is filed for the year in advance, based upon the assets as of the first day of the taxable period.
Thus, the due date for the initial franchisetax return is August 15, 2005, based upon assets as of its incorporation or qualification date, for the taxable period from April 18, 2005 to December 31, 2005.
For franchisetax purposes, the term "corporation" also includes a bank, state limited banking association, savings and loan association, limited liability company, professional limited liability company, a corporation that elects to be an S corporation for federal income tax purposes, and a professional corporation.
A corporation filing an annual franchisetax report that is not required to pay franchisetax by electronic funds transfer (EFT) may request an extension until November 15 to file the report.
To apply for exemption from the Texas franchisetax based on one of the other provisions available under Texas law, submit a completed Form AP-204, identifying the section that applies to the corporation, along with all required documentation as explained in Publication 96-1045, Guidelines to Texas Tax Exemptions.
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