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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 Minnesota, the franchise tax is imposed on corporations for the privilege of doing business in the state. This tax applies to both domestic corporations (those organized under Minnesota law) and foreign corporations (those organized under the laws of another state or country but doing business in Minnesota). The franchise tax is calculated based on a corporation's net income apportioned to Minnesota. The tax rate is 9.8% of the corporation's taxable net income. Additionally, Minnesota has a minimum fee that varies depending on the corporation's total sales, with the fee ranging from $0 for corporations with Minnesota property, payroll, and sales each totaling less than $970,000, to a maximum of $9,840 for corporations with Minnesota property, payroll, and sales each totaling $20 million or more. It's important for businesses to comply with franchise tax requirements to avoid penalties and ensure good standing in the state.

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Taxes

franchise tax

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Taxes

franchise tax

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