Franchise Tax Services
State franchise taxes are complicated, because they are typically not based on a person or company’s revenue or income, but rather on their perceived net worth. Some states apply them to businesses that aren’t located within their jurisdiction but still have a tax filing obligation due to sales and other business transactions that have taken place within the state. If you are under audit due to state franchise taxes, we have the expertise to help.
- Review the franchise tax claim and you company’s records during an initial free consultation.
- Perform an evaluation and analysis of your company’s transaction records and tax filings to see how firm a claim of nexus (or other standard being applied) is by the state.
- Draft a response to the state taxing authority to mitigate their demand.
- Represent you before the state taxing authority.
Question: What is a franchise tax?
Answer: Franchise tax is a tax charged by some US states to corporations with a nexus (aka a filing obligation due to a sufficient physical presence) within those states. The common feature of a state’s franchise tax is that it is not based on income. Rather, the typical franchise tax calculation centers around the “net worth” of the taxpayer.
Our tax resolution team is well versed in the challenges faced by modern businesses in this age of e-commerce and cloud services, such as SaaS and PaaS. We work with businesses and professional service providers in all fields, so we have the knowledge to explain your business to the taxing authorities and to demonstrate why they may be incorrectly evaluating the net worth they are basing their calculations on. We are also more than just a company that represents clients in audit situations. We are a full-service tax preparation and accounting firm, so we have experts in-house who can address every single issue that can arise during your examination. We can also continue to work with you once the audit is complete, so you can avoid future problems with state franchise taxes.
GPL Tax & Accounting is here to handle your personal and business tax preparation and planning needs. We can also handle your bookkeeping and accounting requirements. GPL provides all the tools and know-how you need to be in the best tax position while staying compliant with all tax regulations.
I got a letter from the Califorina State Franchise Board that says I owe them $12,000 in taxes. I lived in California the year in question, but I didn’t work enough to even have to file a tax return. What do I do?
How do I show that I don’t have a “nexus” in a given state?