Illinois’ franchise tax is part of the state's annual report filing and its foreign registration filing. It is, by FAR, one of the most complex annual filings for a secretary of state.
The Illinois annual report is typically filed by your tax accountant for good reasons: it has complex instructions, Illinois does not alert you if you overpay, and filing incorrectly (or not at all) can cause the state registration to lapse and be revoked.
The Franchise Tax applies to Corporations, both foreign and domestic. This article is focused on Foreign Corporations (those domestically registered outside of Illinois, e.g., Delaware)
Franchise Taxes are due with your Illinois Annual Report. To calculate your annual report due date: the annual report is due at the end of the month PRIOR to the Anniversary Month. The Anniversary Month is the month the company was initially registered in Illinois.
There are also Franchise Taxes payable after initially registering as a foreign company in the state for some companies, although Illinois will inform those companies of the amount owed after their foreign registration filing is submitted.
There are a few components to an Illinois annual report.
The annual report itself includes standard questions on many Secretary of State annual reports: basic business information, officer/director information, etc. Unfortunately, it cannot be filed online by foreign corporations.
The last part of the form, and the most complex part, focuses on paid-in capital, apportionment, and the franchise tax calculation.
On the Illinois annual report, you must report both “Paid in Capital” and “Paid in Capital on record with the Secretary of State”. If these numbers are different, you also need to file BCA 14.30 with your Annual Report. We’ll come back to that.
Paid in Capital in this instance is the sum of “Stated Capital” and “Paid-in Surplus Accounts”. This is typically the combination of Federal Form 1120, Schedule L, lines 22 and 23.
Illinois franchise tax is calculated by multiplying 0.001 by an estimate of the portion of your business that takes place in Illinois, multiplying that by Paid-in Capital, before adding penalties/interest (if applicable) and a Filing Fee. The annual report form has a worksheet to calculate what you owe.
Here are the basic steps:
Total due for the annual report is the Franchise Tax, Penalties and Interest, and the Filing Fee.
If your Paid in Capital or Issued Shares have changed since you last reported them to the Illinois Secretary of State, you must file BCA 14.30 with your Annual Report. The point of this form is to capture those changes and catch you up on any additional franchise taxes you owe as a result. It’s due with the Annual Report.
Sometimes this form is called the Cumulative report of changes in issued shares or paid-in capital, or the “Cumulative Report”.
The form itself requires you to report on anything not previously reported to the state:
Based on that information, you will calculate whether you owe additional franchise tax for the year, which is reportable on this filing, and paid when you file your Annual Report.
Keep in mind, you may not owe additional franchise taxes if the total amount due between filing 14.30 and the Annual Report is less than the exemption amount for the year. You will owe the Filing Fees regardless, however.
Here are the basic steps:
Calculate the Cumulative Change, which is the change in Paid-in Capital since it was last reported to the Secretary of State.
Add penalties and interest. If BCA 14.30 is late, calculate two numbers and add them together:
Add a Filing Fee, which is $5
Total due for BCA 14.30 is Franchise Tax, Penalties and Interest, and the Filing Fee.
Illinois has an "exemption" amount that varies by year, which may mean you don't owe any franchise taxes. As of Jan. 1, 2025, that number increased from $5,000 to $10,000.
This means if the TOTAL amount due between BCA 14.05 (the annual report) and BCA 14.30 (for when your issued shares or paid-in capital changes) is less than or equal to the exemption amount, you only owe the minimum filing fees.
Companies that must file EEO-1 must attach the Workforce Demographic Data portion of their EEO-1 to their Annual Reports.
Public companies listed on a major US exchange that have their “Principal Executive Office” in Illinois must also file BCA 8.12, the Female and Minority Directors Report.
When filing as a foreign corporation in Illinois, companies must provide information to calculate franchise taxes. However, in this situation, Illinois will calculate the tax owed for you and send you a bill after you submit the foreign registration filing.
Illinois franchise tax calculations rank among the most complex state filings, requiring detailed paid-in capital analysis, apportionment calculations, and coordination of multiple forms (BCA 14.05 and potentially BCA 14.30).
While Discern doesn't file Illinois franchise taxes due to their complexity, we automatically notify you when Illinois filings are due and provide guidance on requirements. Discern also provides registered agent service in Illinois and across all 51 jurisdictions, plus automated compliance tracking for simpler state filings.
Ready to streamline your Illinois compliance? Book a demo with Discern today.
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