A franchise tax is a state tax on businesses and other entities (corporations, limited liability companies, trusts, etc.) that are formed in or doing business in a state.
A franchise tax is said to be a tax on the privilege of doing business in a state and is sometimes referred to as a privilege tax. The amount of tax due is often calculated as a percentage of a business’s income, for example.
In Florida, there is no specific tax referred to as a 'franchise tax' or 'privilege tax' on businesses. Instead, Florida imposes a corporate income tax on certain business entities. This tax applies to corporations operating within the state that are incorporated under Florida law or conducting business, earning income, or existing within Florida. The Florida corporate income tax rate is generally a flat rate on the taxable income of the corporation. Limited liability companies (LLCs), sole proprietorships, and partnerships are not subject to the corporate income tax unless they elect to be treated as a corporation for tax purposes. It's important for businesses to consult with an attorney or a tax advisor to understand their specific tax obligations in Florida.
