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franchise tax

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 Pennsylvania, the franchise tax, also known as the Capital Stock/Foreign Franchise Tax, was phased out and completely eliminated as of January 1, 2016. Prior to its elimination, it was a tax imposed on corporations for the privilege of doing business in Pennsylvania, calculated based on a company's capital stock value, income, or a combination of both. Since the tax has been eliminated, businesses in Pennsylvania are no longer required to pay this tax. However, businesses in Pennsylvania are still subject to other state taxes, such as the Corporate Net Income Tax, Sales and Use Tax, and employer withholding taxes, among others. It's important for businesses to stay informed about their tax obligations and consult with an attorney or tax professional for current tax regulations and compliance.

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Taxes

franchise tax

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Pennsylvania State Code

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Taxes

franchise tax

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