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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 Indiana, the state does not impose a traditional franchise tax on businesses. Instead, Indiana levies a corporate income tax, which is a tax on the income of corporations doing business within the state. The corporate income tax rate in Indiana is a flat rate applied to a corporation's adjusted gross income, which is its income after certain deductions. As of the knowledge cutoff in 2023, this rate is 4.9%. It's important to note that while Indiana does not have a franchise tax, businesses operating in the state are still subject to various other state taxes, such as sales tax, property tax, and employer withholding taxes. Additionally, Indiana requires certain business entities, like limited liability companies (LLCs), to pay an annual Business Entity Report fee, which is not a tax but a filing fee for the maintenance of the entity's good standing with the state.

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Taxes

franchise tax

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Taxes

franchise tax