Despite the name, a franchise tax is not a tax for starting or purchasing a franchise. It’s a tax that some states charge for the right or privilege of doing business in their state. Fees vary state-to-state, and if you are an LLC, partnership, or corporation, you may be subject to a franchise tax. States that currently have a franchise tax in place include: Alabama, Arkansas, Delaware, Georgia, Illinois, Louisiana, Missouri, New York, North Carolina, Oklahoma, Pennsylvania, Tennessee, Tennessee, Texas, and West Virginia. This list is subject to change, so be sure to check your state’s local requirements to be sure you’re meeting your obligations. For additional questions on franchise tax, check in with your accountant, bookkeeper, or trusted tax professional.