Franchise Tax & Small Business
The small business community has been particularly vocal in its complaints about the margin tax—objecting to its complexity, the corresponding compliance costs, and the size of their tax bill.
In spite of those complaints, very small businesses benefit from a much more generous small business exemption. In the initial 2006 legislation, small businesses were given an additional break from the old franchise tax, as the small business exemption was effectively tripled, increased from $150,000 to just under $450,000. In 2008, the legislature increased the exemption further, to $1 million, where it remains today--at a cost to the state and a savings to small businesses of roughly $270 million annually.
In spite of those complaints, very small businesses benefit from a much more generous small business exemption. In the initial 2006 legislation, small businesses were given an additional break from the old franchise tax, as the small business exemption was effectively tripled, increased from $150,000 to just under $450,000. In 2008, the legislature increased the exemption further, to $1 million, where it remains today--at a cost to the state and a savings to small businesses of roughly $270 million annually.