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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 Rhode Island, the franchise tax is not imposed as a separate tax on businesses. Instead, Rhode Island levies a corporate income tax on corporations doing business within the state. This tax is based on the net income of the corporation and is calculated at a flat rate. As of the knowledge cutoff in 2023, the corporate income tax rate in Rhode Island is 7%. It's important for businesses operating in Rhode Island to understand that while there isn't a specific 'franchise tax,' they are still subject to corporate income tax, and possibly other business-related taxes, based on their activities and income generated within the state. Limited liability companies (LLCs), partnerships, and sole proprietorships are not subject to the corporate income tax but may be subject to other state taxes and fees. It's advisable for businesses to consult with an attorney or a tax professional to ensure compliance with all applicable state tax regulations.

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franchise tax

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Taxes

franchise tax

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