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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 Ohio, the state does not impose a traditional franchise tax on businesses. Instead, Ohio has a business tax structure that includes the Commercial Activity Tax (CAT), which is a tax on gross receipts for businesses with taxable gross receipts of more than $150,000 per calendar year. The CAT is applicable to most types of businesses including corporations, partnerships, sole proprietorships, and other entities. The tax is calculated based on the business's gross receipts from sales in Ohio, and the rates are marginal, meaning that as a company's gross receipts increase, the CAT rate may also increase. It's important for businesses operating in Ohio to understand their obligations under the CAT, as it is the primary business tax in the state, replacing the former franchise tax system.

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Taxes

franchise tax

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Taxes

franchise tax

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