States levy a variety of taxes besides income taxes that are often aggregated under the term "franchise tax," although naming conventions vary widely by state. Franchise taxes hit you for the privilege of doing business in a state, regardless of whether you turn a profit.

Unlike corporate income tax, which looks at your actual earnings, franchise tax gets calculated using net worth, capital stock, or flat fees, and the rules change completely once you cross state lines. Texas imposes a franchise tax calculated on a margin base, Washington buries it in their B&O gross-receipts system, and other states brand the same concept as "business privilege" taxes. Several states have enacted significant legislative changes since 2024, including full repeals, rate reductions, and exemption increases that directly affect 2025 and 2026 filing obligations.

This table gives you the essential franchise tax details for 2026 compliance planning. The information is sourced from the latest publicly available sources; however, rules change rapidly, so always verify numbers, forms, and deadlines on the official state website before filing.

Here is the table in standard Markdown format, ready to copy and paste:

Note the following:

• "None" indicates the state doesn't impose a separate franchise tax (though other business taxes or fees may apply).

• "See site" flags items that change frequently or haven't been published yet for the current year. Check the state's revenue or Secretary of State's portal for exact numbers.

• Complexity ratings range from simple flat fees to multi-factor calculations, such as Delaware's two-method system.

• District of Columbia maintains an active Corporation Franchise Tax (Form D-20) and Unincorporated Business Franchise Tax (Form D-30) at 8.25%, as confirmed by the DC OTR.

• Pennsylvania's Capital Stock Tax / Foreign Franchise Tax was repealed for tax years beginning on or after January 1, 2016, per the Pennsylvania DOR.

• Nebraska does not impose a traditional state-level franchise tax separate from its corporate income tax. The "occupation taxes" referenced in some guides are locally imposed city-level taxes, per the Nebraska DOR.

In most states, accountants handle franchise taxes, as they usually require extensive accounting data and are typically filed in conjunction with your other business state tax returns. Franchise taxes most often function as a sort of minimum tax to do business in the state, regardless of profitability.

Key 2025 to 2026 legislative changes

Several states enacted significant franchise tax changes that affect 2025 and 2026 compliance. According to the Tax Foundation, the trend toward reducing or eliminating capital stock-style taxes has accelerated since 2023. Here are the most notable changes:

• Oklahoma: Full repeal complete. No franchise tax filing is required for TY 2024 forward.

• Louisiana: The corporation franchise tax is repealed effective January 1, 2026, per Louisiana DOR. It applied to tax years beginning in 2025 and earlier.

• Tennessee: The property measure (Schedule G) was repealed as the default base under SB 2103. The franchise tax is now calculated solely on net worth at 0.25%, with a $100 minimum.

• Mississippi: The franchise tax rate is being phased down. For TY 2025, the rate is $0.75 per $1,000 of capital in excess of $100,000 per the Mississippi DOR corporate and franchise tax instructions, dropping to $0.50 per $1,000 in 2026, with full repeal scheduled for January 1, 2028.

• North Carolina: The franchise tax rate was reduced for tax years beginning on or after January 1, 2025: $500 on the first $1,000,000 of the tax base, plus $1.50 per $1,000 of net worth above that, per the NCDOR.

• Connecticut: The capital base tax rate dropped to 0.0021 (0.21%) for income year 2025, with full phaseout scheduled by January 1, 2028, per Connecticut DRS.

• Texas: The no-tax-due threshold was raised to $2,470,000 in annualized total revenue for the 2024 and 2025 report years. The threshold rises to $2,650,000 for the 2026 and 2027 report years, per the Texas Comptroller.

• Illinois: The franchise tax exemption was doubled from $5,000 to $10,000, effective for annual reports due on or after January 1, 2025. The franchise tax is administered by the Illinois Secretary of State through the annual report and franchise tax worksheet (Form BCA 14.05).

Here are state-by-state details and compliance resources:

Alabama

Alabama has a Business Privilege Tax. It is typically filed by an accountant, given the detailed financial information required. As of 2024, Alabama annual report filings are due separately with the Secretary of State. The tax is calculated based on net worth with some adjustments, multiplied by the "apportionment factor," less deductions. The rate ranges from $0.25 to $1.75 per $1,000 of Alabama net worth, graduated by federal taxable income apportioned to Alabama.

Per Alabama Act 2022-252, taxpayers subject only to the $100 minimum tax have no filing requirement for TY 2025, eliminating both the filing obligation and the $100 payment. The maximum tax for most entities is $15,000.

We wrote a quick guide on Alabama's Business Privilege Tax.

Arkansas

Arkansas Franchise Taxes apply to corporations registered in the state. These taxes are typically filed by your accountant. Arkansas has detailed information on who needs to file and how to file on its website.

We wrote a detailed guide on Arkansas Franchise Taxes.

California

California has a minimum tax for Corporations called a Franchise Tax. Except for most new corporations in their first taxable year, every corporation incorporated, registered, or doing business in California must pay the $800 minimum franchise tax each year. The first-year exemption for newly incorporated or qualified corporations remains active for 2025.

It's due with your California tax return. California has detailed information about the Franchise Tax on the Franchise Tax Board's website.

LLCs in California are required to pay an Annual LLC tax of $800, which has separate instructions available on the California Franchise Tax Board's website. The first-year LLC exemption expired on January 1, 2024, and has not been renewed. LLCs organized in 2024, 2025, or 2026 owe the $800 annual tax beginning in their first tax year. LLCs with total California income exceeding $250,000 also owe an additional annual fee ranging from $900 to $11,790 depending on income level.

We put together a detailed guide about California's franchise taxes.

Delaware

Delaware has a Franchise Tax for Corporations that uses the lesser of two calculation methods to determine tax due. Under the Authorized Shares Method, the minimum is $175; under the Assumed Par Value Capital Method, the minimum is $400. Both methods cap at $200,000 for most corporations, with a higher cap applicable to Large Corporate Filers as defined under Delaware law. The state also has an annual tax of $300 for LLCs and LPs.

We wrote a detailed guide on Delaware's franchise taxes.

Georgia

Georgia has a Net Worth Tax, which is in addition to its Corporate Income Taxes, due at the same time. It's typically filed by an accountant. The tax uses a graduated rate structure with a maximum of $5,000 for net worth in excess of $22 million. Corporations with net worth of $100,000 or less are not subject to the net worth tax for net worth years beginning on or after January 1, 2018, though they must still file a return.

There is also an initial Net Worth Tax return due for C Corporations on the fifteenth day of the fourth month after initial registration in the state. Georgia has an FAQ about both taxes on its state website.

Here's a guide about Georgia's Net Worth Tax.

Illinois

Illinois Corporate Franchise Taxes are calculated using paid-in capital and typically filed by your accountant. The state provides a franchise tax worksheet directly on the annual report filing. For annual reports due on or after January 1, 2025, the first $10,000 in franchise tax liability is exempt (doubled from $5,000 in 2024). A $2,000,000 annual cap on total franchise tax liability also applies. The franchise tax is administered by the Illinois Secretary of State, not the Illinois Department of Revenue.

Note that the Illinois franchise tax has not been repealed. A previously enacted 2019 phase-out was reversed by the legislature in 2021 (P.A. 102-16), and no enacted repeal date currently exists.

For more information, you can read our detailed guide on Illinois Franchise Taxes.

Louisiana

Louisiana had a Franchise Tax based on Capital Employed in addition to its Corporate Income Taxes, though it has been repealed effective January 1, 2026. It was typically filed by an accountant. The state has detailed information about the repeal on its website.

The Louisiana franchise tax applied to tax years beginning in 2025 and earlier (calendar-year filers had a May 15 due date). Per HB3 of the 2024 Third Extraordinary Session, the franchise tax is fully repealed for tax years beginning on or after January 1, 2026. Alongside this repeal, HB2 cut the corporate income tax rate to a flat 5.5% effective January 1, 2025.

We wrote a short guide on the Louisiana Franchise Tax.

Mississippi

Entities taxed as Corporations pay franchise tax annually for the privilege of doing business in the State of Mississippi. The franchise tax is a component of the corporate income and franchise tax return, so it is typically filed by an accountant.

For TY 2025, franchise tax is computed at a rate of $0.75 per $1,000 of capital in excess of $100,000, or the assessed property values in this state, whichever is greater. The minimum franchise tax due is $25.00. Under a legislated phase-down, the rate drops to $0.50 per $1,000 in 2026, with full repeal scheduled for January 1, 2028.

For more insights, you can view our short guide on Mississippi's Franchise Tax.

Nebraska

Nebraska does not impose a traditional state-level corporate franchise tax separate from its corporate income tax. The "occupation taxes" sometimes associated with Nebraska are locally imposed city-level taxes (such as city restaurant or retail taxes), not a state-level franchise-style tax on corporations. Nebraska's corporate income tax rate for TY 2025 is a flat 5.20%, with upcoming reductions to 4.55% in 2026.

Previously, this guide referenced a state-level Occupation Tax. Based on updated information from the Nebraska DOR, the biennial reporting requirement with the Secretary of State is a reporting obligation with associated fees, not a separate franchise-style tax. The Secretary of State provides filing instructions for biennial reports.

For additional context, see our guide on Nebraska's business tax obligations.

For more guidance on Nebraska's corporate tax obligations, consult the Nebraska Department of Revenue directly.

New York

Both foreign and domestically registered general business corporations typically file Franchise Taxes alongside their corporate tax return, by an accountant. New York has short instructions on the basics of its franchise tax. The tax is computed as the highest of three alternative bases: the business income base (6.5% for income up to $5M, 7.25% above $5M), the capital base (0.1875%), or a fixed dollar minimum ranging from $25 to $200,000 based on New York receipts.

You can also check out our guide on New York's franchise tax for more insights.

North Carolina

North Carolina imposes a franchise (privilege) tax on domestic and foreign corporations doing business in the state. For tax years beginning on or after January 1, 2025, the rate is $500 on the first $1,000,000 of the tax base, plus $1.50 per $1,000 of net worth above $1,000,000, with a $200 minimum. Franchise Taxes in North Carolina are due as part of the Corporate income tax filing and are typically filed by an accountant. The extension period has also increased from 6 to 7 months for tax years beginning on or after January 1, 2025. The state of North Carolina has detailed information about Franchise Taxes on its website.

We also wrote a concise guide on North Carolina's Franchise Tax.

Oklahoma

Oklahoma repealed its franchise tax in 2024. The repeal under House Bill 1039X is fully complete, and no franchise tax filing is required for TY 2024 forward. Final franchise tax returns were due by June 1, 2024, for those paying the maximum tax. All other taxpayers were required to remit by September 15, 2024.

Previously, every corporation doing business in Oklahoma had to file a Franchise Tax return, which was typically filed alongside the state corporate income tax filing, by an accountant. Oklahoma historically released this tax packet, which described details about both tax filings.

Aside from the Oklahoma franchise tax, you might also have other compliance obligations, which we covered in our detailed guide on Oklahoma compliance.

Rhode Island

Rhode Island imposes a minimum entity-level tax on corporations, LLCs, LPs, and LLPs. The corporate income tax is 7% of net income apportioned to Rhode Island, or a minimum of $400, whichever is greater. This $400 minimum functions similarly to franchise taxes in other states. General partnerships have no annual fee due. More details are available from the Rhode Island DOR.

We put together a detailed guide about Rhode Island's business tax.

South Carolina

South Carolina imposes a Corporate License Fee on C corporations in lieu of a separate annual report filing. The fee is 0.1% of capital stock and paid-in surplus, plus $15, with a minimum of $25. It applies to every domestic corporation, every foreign corporation qualified to do business in South Carolina, and any other corporation required to file an SC income tax return.

It is filed with state corporate income tax filings by your accountant. South Carolina has detailed information on who needs to file and how to file on their website.

We have written a quick guide on South Carolina License Fees.

Tennessee

Tennessee has a franchise tax, in addition to its Excise Tax, which is typically filed by an accountant. You can find recent information about both taxes on the state's website.

Under Public Chapter 950 (SB 2103 / HB 1893), signed May 10, 2024, the property measure (Schedule G) was repealed as the default base for tax years ending on or after January 1, 2024. The franchise tax is now calculated solely on net worth at a rate of 0.25% ($0.25 per $100), with a $100 minimum. The prior refund claim window for overpayments under the old property measure closed on November 30, 2024. Public Chapter 950 also introduced a $50,000 net earnings deduction from the excise tax base.

Check out our short guide on Tennessee's Franchise Tax.

Texas

The Texas Franchise Tax is a privilege tax imposed on each taxable entity formed or organized in Texas or doing business in Texas. The tax is calculated as a percentage of a business's margin, which most likely requires detailed input from your accountant. Even if your entity qualifies for "no tax due," you still need to file a Public Information Report (Form 05-102) or Ownership Information Report (Form 05-167); however, the No Tax Due Report (Form 05-163) has been discontinued as of the 2024 report year.

For the 2025 report year, the standard tax rate is 0.75% of taxable margin (0.375% for retail/wholesale), and the no-tax-due threshold is $2,470,000 in annualized total revenue. Per the Texas Comptroller, the threshold rises to $2,650,000 for the 2026 and 2027 report years.

The state has detailed information on the applicability of the franchise tax to your legal entity and how to pay it on its website. Texas franchise taxes are generally due May 15, tracking the state's annual filing calendar. If May 15 falls on a Saturday, Sunday, or legal holiday, the next business day becomes the due date. Confirm against current Texas Comptroller instructions each year.

For more guidance, you can review our detailed guide on Texas Franchise Taxes.

Wisconsin

For Corporations, Wisconsin has a couple of filings that resemble franchise taxes, either in name or format, that are typically filed by an accountant. Foreign-registered Corporations in Wisconsin must report on "Capital representation" in Wisconsin on the state's annual report, which is used to calculate the filing fee. It requires detailed financial information.

The state also has Franchise Taxes at a rate of 7.9%, which is the same rate as Wisconsin's Corporate Income Tax. The Franchise Tax applies to domestic corporations and foreign corporations doing business in Wisconsin, while the Corporate Income Tax applies to foreign corporations not subject to the Franchise Tax.

Wisconsin provides detailed guidance on who is required to file franchise taxes and how to file on its website.

We also put together a quick guide on Wisconsin Franchise Tax.

Wyoming

Wyoming technically doesn't have a "franchise tax," but the filing fee (or "Annual Report License Tax") for the annual report uses an asset calculation worksheet based on total assets in the state, which an accountant typically files. Per the Wyoming SOS fee schedule, the rate is $0.0002 multiplied by Wyoming-sited assets, with a $60 minimum.

Annual Reports for Wyoming corporations and registered limited liability partnerships are due on the first day of the anniversary month of formation.

For more guidance, you can check out our detailed guide on Wyoming Franchise Taxes.

Track franchise tax deadlines with Discern

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Schedule a demo with Discern today to see how it works.

Frequently asked questions about franchise tax filing

Below are answers to common questions about franchise taxes across U.S. states.

How many states currently impose a franchise or capital stock tax?

Roughly 9 to 10 states impose active capital stock or franchise-style taxes, depending on the year and how the category is defined: Connecticut, Illinois, Massachusetts, Mississippi, New York, North Carolina, South Carolina, Tennessee, and Wyoming, with Louisiana included for tax years through 2025 (its franchise tax is repealed effective January 1, 2026). Several other states, including California, Delaware, Kentucky, and Texas, impose franchise-style taxes calculated differently (flat minimums, margin-based, or gross-receipts-based). Always verify against the relevant state's Department of Revenue or Secretary of State for current obligations.

What's the difference between franchise tax and corporate income tax?

Corporate income tax is calculated on a company's actual net earnings. Franchise tax, by contrast, is charged for the privilege of doing business or maintaining a legal entity in a state, and it applies regardless of whether the entity earns a profit. Franchise taxes are typically calculated using net worth, capital stock, paid-in capital, or flat fees rather than income.

Which states recently repealed their franchise tax?

Oklahoma fully repealed its franchise tax effective TY 2024. Louisiana's franchise tax repeal took effect for tax years beginning January 1, 2026. Mississippi is in a legislated phase-down, with full repeal scheduled for January 1, 2028. Connecticut's capital base tax is also phasing out, with full elimination expected by January 1, 2028.

Does the District of Columbia have a franchise tax?

Yes. DC maintains an active Corporation Franchise Tax (Form D-20) and an Unincorporated Business Franchise Tax (Form D-30) at 8.25% on net profits.

Has Illinois repealed its franchise tax?

No. The Illinois franchise tax remains in effect. A previously enacted 2019 phase-out was reversed in 2021. The current exemption is $10,000 (the first $10,000 of computed liability is exempt) for annual reports due on or after January 1, 2025. No enacted repeal date exists, though HB 5526 (introduced February 2026) proposes a full repeal by January 1, 2028. That bill has not been enacted.

Are LLCs subject to franchise tax?

It depends on the state. California, Delaware, Kentucky, Rhode Island, Tennessee, and Texas all impose franchise-style taxes or minimum entity taxes on LLCs. Many other states with franchise taxes apply them only to corporations. Always check the specific state's rules for your entity type.