Franchise Tax

Definition

State tax charged for the privilege of doing business in certain states, regardless of whether the business is a franchise.

Related Terms

Annual Report (State)

Required yearly filing for LLCs and corporations updating the state on current business information, often with a fee.

FAQs

Do gig workers pay franchise tax?

Only if you form an entity in states with franchise tax like Delaware, Texas, or California.

Similar Terms

1099 Form

IRS tax form reporting income paid to non-employees, commonly 1099-NEC for contractor pay or 1099-K for payment platforms.

1099-K

Tax form reporting payments from payment networks like PayPal or gig platforms when exceeding annual thresholds.

1099-NEC

Tax form for non-employee compensation of $600 or more, replacing Box 7 of the old 1099-MISC for contractor payments.

Self-Employment Tax

Social Security and Medicare taxes for self-employed individuals, totaling 15.3% on net earnings.

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Last updated: January 18, 2026

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