States with franchise tax and filing deadlines for 2024

Finding out which taxes to pay

Various states across the United States continue to levy franchise taxes also called privilege or capital stock taxes on businesses, often as an annual fee for the privilege of doing business within their jurisdiction. These taxes can vary in structure and rates, and they play a crucial role in generating revenue for state governments.

Wait a second!

Is this another name for state tax?

Nope, franchise tax differs from state income tax, which is calculated on the business’s profit. A franchise tax may apply to a business regardless of whether or not it earned any income in the state if it otherwise meets the requirements to file and pay the tax.

But how to decide whether you should pay the tax or not?

Who is required to pay franchise tax?

The requirement to pay franchise tax varies by state and depends on the legal structure of your business and the specific tax laws in the state where your business is located. Generally, the following types of businesses may be required to pay franchise tax:

Corporations: If you’re running a corporation, whether it’s a big C-corporation or a smaller S-corporation, you’re likely to tangle with franchise tax. It’s sort of like paying rent to the state for using its business playground. The tax usually depends on your company’s net worth or capital stock.

Limited Liability Companies (LLCs): If you’ve got an LLC, the rules can get a bit trickier. Some states will ask for a piece of your pie, and they base it on things like your earnings, your assets, or some other secret sauce formula. It’s like you’re sharing your lemonade stand profits with the state’s lemonade stand inspector.

Partnerships: If you’re in a partnership, like a Limited Partnership (LP) or a Limited Liability Partnership (LLP), you’re not immune either. Some states might want a piece of the action, and they often base it on your income, assets, or the partners’ interests. It’s as if your business is hosting a little get-together, and the state wants a party favor.

Nonprofits: Even those doing good deeds might face some form of franchise tax in certain states. Nonprofits are often tax-exempt at the federal level, but some states still want a little something for the privilege of being part of their charitable landscape.

Suppose you come under one of these categories, what should you do now?
First, let’s look at whether you’re operating in the states that take franchise tax.

As of 2024, 16 states levy franchise/state capital tax that ranges from a low of 0.02 percent in Wyoming to a high of 0.3 percent in Arkansas. 

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Here’s a table showing how much taxes need to be paid if you operate your business in one of these states:

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So now you have a good idea of whether you’re liable to pay franchise tax or not. If you’re then you’ve got to research what’s the deadline for paying the tax before levying any penalty.

Don’t worry, that’s why we are here. Here are the deadlines for franchise taxes

Filing deadlines for franchise taxes

Delaware:

For Corporations, the due date for the filing of the Annual Report and paying Franchise Tax is March 1st of each year. 

For LLCs (limited liability companies) and Partnerships, the due date for the payment of Franchise Tax is June 1st each year. No Annual Report is required to be filed by the LLCs or Partnerships.

New York:

For LLCs (limited liability companies) and Partnerships, the due date for the payment of Franchise Tax is April 15 of each year.

Arkansas

Arkansas state law requires all corporations, LLCs, banks, and insurance companies registered in Arkansas to pay an annual franchise tax on May 1st of every year. Failure to pay can result in the imposition of additional fees, penalties, and interest, or even revocation of the authorization to do business.

North Carolina

Franchise and income tax returns are due on the 15th day of the fourth month following the close of the income year. An income year ending on any day other than the last day of the month is deemed to end on the last day of the calendar month ending nearest to the last day of the actual income year.

Mississippi

Corporate income and franchise tax returns are due by March 15 — or by the 15th day of the 3rd month following the end of the taxable year (for fiscal year filers).

Extended Deadline with Mississippi Tax Extension: Mississippi offers a 6-month business extension, which moves the filing deadline to September 15 (for calendar year filers).

Georgia

Computed on the net worth of the corporation as reported on the prior year ending balance sheet and is due on or before the 15th day of the fourth month (C Corporations) or third month (S Corporations) following the beginning of the corporation’s tax year. 

Illinois

First day of your business’ anniversary month.

For example, if your company was formed on July 15, 2021, your annual report is due June 30, 2022.

Louisiana:

  • Initial return: An initial return covering the period beginning with the date the corporation first becomes liable for filing a return and ending with the next close of an accounting period must be filed on or before the 15th day of the third month after the corporation first becomes liable.
  • Annual return: Louisiana corporation franchise tax accrues on the first day of each accounting year, and the return for that period must be filed on or before the 15th day of the fifth month of that accounting year.

Oklahoma:

Oklahoma Franchise Tax is due and payable on July 1st of each year. A ten percent (10%) penalty and one and one-fourth percent (1.25%) interest per month is due on payments made after the due date. 

Tennessee

The due date of a franchise and excise tax return is the 15th day of the fourth month following the closing of the taxpayer’s books and records. For calendar year filers, this means the due date is April 15.

Texas

Franchise tax reports are due on May 15 each year. If May 15 falls on a Saturday, Sunday, or legal holiday, the next business day becomes the due date. 

The Comptroller’s office will tentatively grant an extension of time to file a franchise tax report upon timely receipt of the appropriate form with a $50 penalty for a franchise tax report filed after the due date.

Please remember that tax laws and deadlines can change, so it’s essential to verify the specific requirements for your business with the official websites of the relevant state tax authorities or consult with a tax professional familiar with the latest tax laws in your state for the most up-to-date and accurate information.

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