Franchise Tax (Noun)
Meaning
A tax that is imposed by states on corporations; it depends both on the net worth of the corporation and on its net income attributable to activities within the state.
Classification
Nouns denoting possession and transfer of possession.
Examples
- The company's financial department had to pay a significant franchise tax to the state government due to its large net worth and profits.
- Many small businesses in the state struggled to meet the annual deadline for filing franchise tax, often resulting in penalties and fines.
- Lawmakers debated about revising the franchise tax laws to make them more business-friendly and encourage companies to relocate to the state.
- The state's revenue department collected a substantial amount of franchise tax from corporations that operated within its borders, using the funds to support public services.
- As part of its tax planning strategy, the multinational corporation sought to minimize its franchise tax liability by optimizing its financial structures and reallocating profits.