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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 Hawaii, the franchise tax is not imposed in the same manner as in some other states. Instead, Hawaii has a corporate income tax that applies to corporations doing business in the state. This tax is based on the net income of the corporation and is calculated at various rates depending on the amount of taxable income. The rates can range from 4.4% to 6.4%. Hawaii does not have a separate franchise or privilege tax for the mere act of doing business in the state. However, all corporations, including foreign corporations, are required to file annual reports and pay an annual fee, which is somewhat akin to the franchise taxes in other states. This fee is not based on income but is a flat rate that varies depending on the entity type. For example, domestic and foreign profit corporations are required to pay an annual fee of $15. It's important for businesses to consult with an attorney or a tax advisor to understand their specific tax obligations in Hawaii.

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Taxes

franchise tax

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Taxes

franchise tax

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