State and local income tax is imposed by jurisdictions on business income earned within their boundaries.
Franchise tax is levied by certain states for the privilege of operating or being chartered in that state, often based on revenue, capital or net worth rather than income.
While income tax is based on profits, franchise tax may apply regardless of profitability and is calculated using alternative bases such as revenue or capital. Businesses may be subject to both taxes, each with different rules and filing requirements.
Managing these taxes becomes complex, requiring businesses to:
- Navigate different tax regimes, filing obligations and compliance requirements across states.
- Understand the division of income among states and identify where income is earned.
- Absorb the risk and administrative burden of state conformity to federal tax changes and evolving state regulations.
Without the right strategy, these challenges can lead to errors, penalties and missed opportunities.
RSM helps businesses manage state and local income tax and franchise tax obligations through planning, compliance and multistate tax support. We work with your team to streamline reporting, reduce risk and improve efficiency across jurisdictions.
Why choose RSM for state income and franchise tax services
RSM brings extensive experience navigating complex state and local income tax and franchise tax regulations across the nation. Our professionals understand evolving legislation and apply practical solutions to help businesses stay current and confident.
We focus on the needs of middle market organizations, delivering hands-on, tailored support that aligns with your operations, resources and growth objectives.
State and local income tax and franchise tax services
Explore how RSM supports income and franchise tax compliance, planning, and risk management across jurisdictions.
