Category: Law and Taxation

Franchise Board Tax


The franchise taxes are taxes which are levied on the franchises of any company being opened in another country or location. For example a franchise of Levi's company wants to open a franchise in New York, so the tax it has to pay on the franchise is known as franchise tax. It is impose don each organization's each project and operation. For franchise purposes the term "corporation" also includes banks, hospitals, savings and loan associations, limited liability Company, professional limited liability company, a corporation that elects to be an S corporation for federal income tax purposes, and a professional corporation.


These franchise taxes give the following advantages to the government:


  • When there is a foreign investment in the country so the government also wants it share as it is providing it the land so the government wants a share in the earnings of the company.
  • These companies when opening up their franchise must be aware of what they are about to sell and produce is not prohibited in the country's law. By paying these taxes and all the company provides a list of its income and what it is selling. By this the government comes to know that for what purpose they are using the land.
  • Another advantage of levying these taxes is that the government earns revenues. With the direct and the indirect taxes. For example the income taxes and all are a direct source of income but taxes like sales tax give the government more opportunities to earn revenues. For example there's a franchise of Levi's launched in Pakistan, mostly people prefer to take Levi's jeans. As they purchase the jeans they automatically give the sale tax which goes to the government as their revenue. This is a big benefit of these taxes.
  • The property taxes imposed on these franchises also provide government an income. As because of this the big enterprises give the tax according to their property and size of the firm. The more the firm expands and tries to do business the more it has to pay tax to the government.
  • Excise taxes also serve as an income method to the governments. These excise taxes are levied on the production of goods and services by any franchise. This also provides great benefits to the government as the more the firm produces the more it has to pay to the government.
After the study of the above given franchise taxes it could be easily assessed that why the board of franchise taxes impose taxes of these franchise and what is the benefit to every government by the franchises working in it's location. Franchise board taxes deal with the ups and downs of the income due to the taxation. If the economy of the company is going down the percentage of the taxes is increased.

Similarly this percentage is decreased if the economy is going up. This up and down of the economy and imposition of taxes are dealt by this franchise board tax.





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