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Glite Dictionary
franchise tax

franchise tax

1 7.9
A tax some US states charge companies for the right to do business there based on their value or income
  • noun
  • /ˈfrænˌtʃaɪz tæks/
  • Specialized
translation icon : impuesto sobre franquicias
  • Louisiana is considering a franchise tax, for example, and the pending California legislation would include a small gross receipts tax on limited liability companies.
  • corporate franchise tax
  • franchise tax on partnerships
  • pays the franchise tax

Examples

  • Negotiating a franchise tax

    Academic text (2002)

  • Halting the phasing out of the capital stock and franchise tax could bring in an estimated $275 million a year.

    Blog text (29)

  • In 2006, the state legislature changed the business franchise tax.

    Blog text (18)

  • The primary issue facing Texas restaurants involves the double taxation restaurants face on the MBGR and franchise taxes.

    Blog text (18)

  • Thus, the 14% MBGR tax expense restaurants hand over to the state becomes taxed again by the franchise tax.

    Blog text (18)

  • And if you don't pay the fine, then they'll send the fine to the California Franchise Tax Board to basically lien you up until you pay.

  • "One achievement was signing 2011 legislation to phase out the state's business franchise tax over five years," Edwards wrote. "Nixon said that 'phasing out this burdensome tax will encourage businesses to expand their operations and create jobs in Missouri.'"

    Blog text (31)

  • The company must submit its financial report to calculate the amount owed for the franchise tax each year.

  • In California, new businesses need to budget for the annual franchise tax as part of their expenses.

  • Understanding the implications of the franchise tax is crucial for corporations operating in multiple states.

Synonyms

tax
vsfranchise tax
∞ 1.0

A charge people must pay to the government on income or property

is a state-level levy applying to companies based on net worth and in-state income

How Large

tax liability
  • Specialized
10 5.1
franchise tax
  • Specialized
1 7.9
tax
∞ 1.0
to charge
808 2.0
fee
729 1.0

Surface Forms

franchise tax singular
franchise taxes plural

Morphology

franchise + tax

The phrase is compositionally built from 'franchise' (a licensed business or the privilege to operate) and 'tax' (a government charge), so a learner would infer it is a government charge related to franchises or the right to do business. However, its precise legal/technical sense in US practice (how it is calculated, that it can apply to corporations generally as a charge for the privilege of doing business rather than only to franchise chains) is specialized and not fully predictable from the constituents alone, so prior exposure or explanation is needed.

Etymology

The noun franchise tax comes from the idea of a franchise as a special right or 'permission' to run a business in a place. So a franchise tax is a fee a company pays to the state for that 'permission', which is why it means a tax on doing business there.