It is important to understand the consequences of not paying your franchise taxes if you are obligated to pay them in any state where you’re doing business.
First, many states levy substantial fines and interest on businesses that fail to pay their franchise taxes. In some cases, the penalties and interest can reach thousands of dollars.
In addition to financial penalties, failing to pay franchise taxes can lead to having your business license or permit revoked and could even result in criminal prosecution. For these reasons, it is important to be aware of your franchise tax obligations in every state where you do business and make sure that you make all franchise tax payments on time.