U.S. Tax Guide on Other Business Taxes
Beyond corporate income tax, sales/VAT, and property transaction taxes, U.S. businesses face a wide range of state and local charges that affect their cost structure and compliance workload. These include franchise/privilege and net worth taxes, gross receipts taxes, business personal property taxes, payroll-linked contributions, annual report fees, and targeted local levies such as business license taxes and commercial rent taxes. This guide outlines the key categories, how they are typically computed, and provides a state-by-state overview (including the District of Columbia).
Table of Contents
- Overview
- Scope: What Counts as “Other Business Taxes”?
- Who Pays and How It’s Assigned
- How These Taxes Are Calculated
- Exemptions & Thresholds
- Filings, Forms & Deadlines
- State-by-State Overview (50 States + D.C.)
- Structuring & Compliance Tips (Non-Tax-Advice)
- Glossary
- FAQ (Other U.S. Business Taxes)
Overview
States and localities raise revenue from businesses using a mosaic of taxes and quasi-taxes that operate alongside (but separate from) corporate income, sales/VAT, and property transaction taxes. The most impactful categories are franchise/privilege taxes (sometimes based on net worth or margin), gross receipts–style taxes, business personal property taxes, payroll-linked contributions (state unemployment insurance, disability, paid leave), and local business license/occupation taxes. Many jurisdictions also impose annual report fees and minimum taxes to maintain an entity in good standing.
Scope: What Counts as “Other Business Taxes”?
This guide includes franchise/privilege and net worth taxes; gross receipts/commerce and B&O taxes; business personal property taxes; payroll-linked contributions; local business license, occupation, and commercial rent taxes; and annual/minimum entity fees. It excludes corporate income taxes, sales/VAT taxes, and taxes on real estate transactions (deed/transfer).
Franchise/Privilege & Net Worth/Capital Stock Taxes
Levies for the privilege of doing business, often measured by net worth, paid-in capital, margin, or a minimum amount. Some apply to both corporations and pass-throughs (with differing bases).
Gross Receipts/Commerce & Business Occupation Taxes
Taxes on top-line receipts (sometimes with industry classes or thresholds). Examples include statewide GRT/“commerce” taxes or local B&O taxes.
Business Personal Property Tax
Property tax on tangible business assets (machinery, equipment, furniture, sometimes inventory). Assessments, exemptions, and local administration vary widely.
Payroll-Linked Contributions (UI, SDI, Paid Leave)
Employer-funded programs such as State Unemployment Insurance (SUTA), State Disability Insurance in select states, and Paid Family & Medical Leave premiums in some jurisdictions.
Business License/Commercial Rent/Local Occupation Taxes
Local taxes or fees for the right to operate, sometimes measured by gross receipts, headcount, or square footage. A few places tax commercial rent.
Annual Reports, Minimum Taxes & Entity Fees
Flat charges to maintain entity status (e.g., annual reports, franchise minimums, LLC fees) and various filing/registration fees.
Who Pays and How It’s Assigned
Statutes specify taxpayer and base. Some charges are borne at the entity level (e.g., franchise, net worth, GRT), others at the employer level (UI, paid leave), and others locally for the business location (license/occupation, commercial rent).
How These Taxes Are Calculated
Common bases: net worth or capital; gross receipts with thresholds or tiered classes; payroll/wages; or flat per-entity fees. Minimum taxes often apply even with low activity.
Common Rate/Measure Patterns
- Franchise/Net Worth: % of net worth/capital; margin-based amounts; or flat minimums by receipts/asset bands.
- Gross Receipts: Single rate on top line or tiered by industry/size; thresholds to exempt small filers.
- Business Personal Property: Local assessment ratios × millage; exemptions for small asset totals or specific property types.
- Payroll-Linked: Employer tax rates × taxable wage base; program-specific (UI/SDI/paid leave).
- Local License/Occupation: Fee schedules by receipts, employees, square footage, or NAICS class.
Worked Examples
- Franchise minimum: A flat $300 annual franchise due regardless of income.
- Gross receipts: 0.3% on $2,000,000 receipts → $6,000 (before exclusions/credits).
- UI: Employer rate 2.5% × $12,000 wage base per employee → $300 per employee per year.
Illustrations only—actual bases, thresholds, and rates vary by jurisdiction and entity type.
Exemptions & Thresholds
Small-business thresholds, industry carve-outs, enterprise zones, inventory exemptions for BPP, and nexus rules for GRT-style taxes are common. Filing waivers may apply below de minimis levels.
Filings, Forms & Deadlines
Due dates often differ from income/sales tax calendars. Many states require separate registrations for UI/paid leave and annual reports to keep entities in good standing.
State-by-State Overview (50 States + D.C.)
High-level snapshot of prominent “other” business taxes and charges. Descriptions are generalized; local overlays are common.
| State / D.C. | Key “Other Business Taxes” (excluding corporate income, sales/VAT, and property transaction taxes) |
|---|---|
| Alabama | Annual business privilege/franchise tax (based on net worth); local business license taxes; business personal property tax; employer UI. |
| Alaska | No statewide sales tax but many local sales/license taxes; oil & gas–heavy severance; business personal property (local); employer UI. |
| Arizona | State UI; local business license fees; business personal property (county); annual report fees for entities. |
| Arkansas | Franchise tax (entities); business personal property (local); employer UI; local business license taxes. |
| California | Annual franchise minimums (corporations) and LLC annual fee/gross-receipts fee; state disability insurance and paid family leave via payroll; local business license taxes; business personal property (county). |
| Colorado | Local business license and occupation taxes (varies by home-rule cities); business personal property (county); employer UI; state paid family/medical leave premium. |
| Connecticut | Capital base/franchise elements historically (phasing mechanics may vary); business personal property (local); employer UI; paid leave payroll program. |
| Delaware | Gross receipts tax (state) with industry schedules; annual franchise tax for corporations; business license fees; employer UI. |
| District of Columbia | Franchise/privilege tax regime with minimums; unincorporated business tax; business personal property; paid family leave payroll tax; employer UI; commercial rent tax (local). |
| Florida | Reemployment (UI) tax; county/municipal business tax receipts (licenses); tangible personal property tax (county); state-level documentary for financing (not a sales/VAT). |
| Georgia | Net worth/franchise tax; business personal property (local); occupation taxes and business licenses; employer UI. |
| Hawaii | General excise tax is separate from sales/VAT (broad base on gross proceeds); employer UI; local licenses; personal property taxes limited. |
| Idaho | Personal property tax (local, with exemptions/phase-outs in some areas); employer UI; local business license fees. |
| Illinois | Replacement tax (entity-level surcharge), franchise tax elements (phasing mechanics); personal property replacement taxes; local business licenses; employer UI; Chicago and other local occupation taxes. |
| Indiana | Business personal property tax (local, with exemptions for small filers); county-level business personal property filing; employer UI; annual business entity reporting fee. |
| Iowa | Business property tax credits/exemptions interplay; local BPP; employer UI; various local business permits/fees. |
| Kansas | Business personal property tax (local); employer UI; local business license fees; certain industry-specific excise/privilege taxes. |
| Kentucky | Limited liability entity tax (LLET) acts as a gross-receipts/margin-style minimum; local occupational license taxes; BPP; employer UI. |
| Louisiana | Franchise tax (net worth–based); inventory taxes/local ad valorem; numerous parish/city occupational licenses; employer UI. |
| Maine | Franchise minimums on certain entities; local business personal property (with BETR/BETE programs); employer UI; local licenses. |
| Maryland | Annual report and personal property return; county-level business personal property tax; local licenses; employer UI. |
| Massachusetts | Corporate excise includes net worth component; local personal property tax; employer UI; paid family and medical leave contributions. |
| Michigan | Personal property tax with exemptions for small taxpayers/industrial processing; local licenses; employer UI; annual reporting fees. |
| Minnesota | Minimum fees based on factors like property/payroll/sales; local personal property tax (limited); employer UI; local licenses. |
| Mississippi | Franchise tax (capital) historically with reform phases; business personal property; employer UI; local privilege licenses. |
| Missouri | Local business license taxes common; business personal property (county); employer UI; annual registration fees. |
| Montana | No general sales tax; business personal property tax statewide; employer UI; local business licenses. |
| Nebraska | Personal property tax (county); employer UI; local occupation taxes (telecom/utility, etc.); annual reports. |
| Nevada | Commerce tax (gross receipts above threshold); modified business tax on payroll; business license fee (state); employer UI; no traditional corporate income tax. |
| New Hampshire | Business enterprise tax (on compensation, interest, dividends) alongside other regimes; local personal property limited; employer UI. |
| New Jersey | Annual report fees; entity-level minimums; local personal property largely limited; employer UI; assorted local mercantile licenses. |
| New Mexico | Gross receipts tax regime (broad base at state/local); employer UI; local licenses and registrations. |
| New York | Franchise tax with capital/base alternatives; metropolitan transportation surcharges; NYC and other local business taxes (e.g., UBT); commercial rent tax in NYC; personal property taxes limited; employer UI; paid leave premiums. |
| North Carolina | Franchise tax (net worth/capital base); local privilege licenses (limited scope statewide reforms); business personal property; employer UI. |
| North Dakota | Local personal property taxes limited (business equipment in some sectors); employer UI; licensing by locality. |
| Ohio | Commercial activity tax (statewide gross receipts); local municipal net profits taxes (for some entities); employer UI; local licenses. |
| Oklahoma | Franchise tax (capital stock); ad valorem on business personal property; employer UI; local occupation licenses. |
| Oregon | Corporate activity tax (gross receipts–style) at state level; local business license taxes in some cities; employer UI; no general sales tax. |
| Pennsylvania | Capital stock/franchise components historically (reformed over time); numerous local business privilege/mercantile taxes; business personal property (limited); employer UI. |
| Rhode Island | Minimum entity taxes; tangible personal property tax (local); employer UI; local licenses. |
| South Carolina | Annual report/license fee on corporations; business personal property tax; local business licenses (standardization framework); employer UI. |
| South Dakota | No corporate income tax; state unemployment insurance; certain excise/contractor taxes; local business license fees; personal property tax limited. |
| Tennessee | Franchise & excise framework includes a net worth-based franchise tax; separate state business tax (gross receipts–type) for many industries; local business licenses; employer UI. |
| Texas | Franchise (margin) tax at entity level; local business personal property (county appraisal); employer UI; numerous local permits/fees. |
| Utah | Employer UI; business personal property (county) with exemptions; local business licenses; annual entity renewals. |
| Vermont | Minimum entity taxes; local personal property (limited); employer UI; local licenses; recently expanded family/medical leave program elements. |
| Virginia | Local BPOL (business, professional & occupational license) taxes; machinery & tools tax (local personal property subclass); state employer UI; annual entity fees. |
| Washington | State Business & Occupation (B&O) tax on gross receipts; local B&O in some cities; paid family/medical leave payroll premiums; employer UI; personal property tax (county). |
| West Virginia | Business personal property tax; local B&O in some municipalities; employer UI; annual entity filings. |
| Wisconsin | Personal property tax being reformed/limited; employer UI; local licenses; annual report fees. |
| Wyoming | No corporate income tax; business personal property (county); employer UI; annual entity fees; local licenses. |
Structuring & Compliance Tips (Non-Tax-Advice)
- Register early for UI/paid leave accounts and confirm wage bases and experience rates.
- Map local license/occupation requirements for each business location (and remote employees if applicable).
- Inventory assets annually for business personal property filings; track exemptions and phase-outs.
- Model gross receipts/franchise exposure separately from income tax—bases and credits differ.
- Calendar annual reports/minimum taxes to avoid administrative dissolution or penalties.
Glossary
Franchise/Privilege Tax: Charge for the right to do business, often based on net worth, capital, or margin (sometimes with a minimum).
Gross Receipts Tax (GRT/B&O/CAT): Levy on top-line receipts, sometimes with industry classes and thresholds.
Business Personal Property (BPP): Local property tax on tangible business assets (equipment, machinery, furniture, sometimes inventory).
UI (Unemployment Insurance): Employer payroll tax funding state unemployment benefits; rates vary by experience.
Paid Leave/SDI: State payroll-based programs funding disability or family/medical leave benefits.
BPOL/License/Occupation Tax: Local levy or fee to operate, often based on receipts, headcount, or space.
FAQ (Other U.S. Business Taxes)
ℹ️ Click a question to reveal the answer:
What counts as “other business taxes” in this guide?
Franchise/privilege and net worth taxes, gross receipts–style taxes, business personal property taxes, payroll-linked contributions (UI/SDI/paid leave), local business license or occupation taxes (including commercial rent where applicable), and annual/minimum entity fees. It excludes corporate income, sales/VAT, and property transaction taxes.
Are gross receipts taxes the same as sales taxes?
No. Gross receipts taxes apply to a business’s total receipts (often with limited deductions). Sales taxes are imposed on retail sales to customers and are generally collected as a pass-through.
Do all states have a franchise or privilege tax?
No. Many do, but the base and form vary widely—some use net worth or capital, others have minimum fees, and some rely instead on gross receipts–style taxes or local license taxes.
Are business personal property taxes universal across states?
No. Some states or localities fully tax tangible business property, others exempt portions (e.g., small asset thresholds or inventory), and a few have significantly limited BPP taxation.
Which payroll-linked programs might affect employers besides UI?
Some states require contributions for paid family and medical leave or disability insurance. These are separate from federal programs and can be employer- or shared-funded.
Do local business license taxes apply to remote or out-of-city operations?
Often yes if you have nexus (e.g., employees, an office, or regular in-person activity) in the locality. Rules vary—check each city or county’s ordinance.
Are minimum taxes common even if a business has low revenue or losses?
Yes. Many states charge minimum franchise/entity taxes or annual report fees to maintain good standing, regardless of income.
How do gross receipts thresholds work for small businesses?
Some states exempt businesses below a receipts threshold or provide a zero-rate bracket/minimum tax only. Others require filing even if no liability is due.
Do any jurisdictions tax commercial rent paid by tenants or landlords?
Yes, a few localities impose commercial rent taxes. These are typically separate from income or sales taxes and apply to rent paid for commercial space.
What happens if I miss an annual report or minimum fee deadline?
Penalties and administrative dissolution/suspension are possible. Reinstatement typically requires filing outstanding reports, paying fees, and curing taxes due.
Are “other business taxes” deductible for federal income tax purposes?
Often yes as ordinary and necessary business expenses, but deductibility and timing depend on the type of tax and accounting method. Consult a tax advisor for specifics.
How can multi-state businesses manage local license/occupation taxes efficiently?
Centralize tracking of locations, employees, and local thresholds; maintain a calendar of renewals; and standardize data needed across jurisdictions (receipts, NAICS codes, headcount).