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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 the state of Washington, there is no specific tax referred to as a 'franchise tax' or 'privilege tax' on businesses. Instead, Washington imposes a Business and Occupation (B&O) tax, which is a type of gross receipts tax. This tax applies to the gross income of the business and is measured on the value of products, gross proceeds of sales, or gross income of the business. The B&O tax rate varies depending on the type of business activity conducted. Unlike a traditional franchise tax that might be based on net income or capital holdings, Washington's B&O tax is based on the gross income without deductions for labor, materials, taxes, or other costs of doing business. Additionally, Washington does not have a corporate income tax or personal income tax, which distinguishes its tax structure from many other states that do impose franchise or privilege taxes.

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Taxes

franchise tax

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Taxes

franchise tax

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