HOW TO CALCULATE FRANCHISE TAXES
The methods for calculating your franchise tax listed below does not include the annual report filing fee of $25.00 per report. Please be sure that you include the annual report filing fee of $25.00 when submitting your payment for each year of franchise tax being paid.
Authorized Shares Method
3,000 shares or less (minimum tax) $35.00
3,001 - 5,000 shares - $62.50
5,001 - 10,000 shares - $112.50
each additional 10,000 shares or portion thereof add $62.50
maximum yearly tax is $165,000.00
For Example
A corporation with 10,005 shares authorized pays $175.00 ($112.50 plus $62.50)
A corporation with 100,000 shares authorized pays $675.00 ($112.50 plus $562.50[$62.50 x 9])
Assumed Par Value Capital Method
To use this method, you must give figures for all issued shares (including treasury shares) and total gross assets in the spaces provided in your Annual Franchise Tax Report. Total Gross Assets shall be those "total assets" reported on the U.S. Form 1120, Schedule L (Federal Return) relative to the company's fiscal year ending the calendar year of the report. The tax rate under this method is $250.00 per million or portion of a million of the assumed par value capital, which is calculated as described below, if the assumed par value capital is greater than $1,000,000. If the assumed par value capital is less than $1,000,000, the tax is calculated by dividing the assumed par value capital by $1,000,000 then multiplying that result by $250.00.
The example cited below is for a corporation having 1,000,000 shares of stock with a par value of $1.00 and 250,000 shares of stock with a par value of $5.00 , gross assets of $1,000,000.00 and issued shares totaling 485,000.
Divide your total gross assets by your total issued shares carrying to 6 decimal places. The result is your "assumed par".
Example: $1,000,000 assets, 485,000 issued shares = $2.061856 assumed par.
Multiply the assumed par by the number of authorized shares having a par value of less than the assumed par.
Example: $2.061856 assumed par s 1,000,000 shares = $2,061,856.
Multiply the number of authorized shares with a par value greater than the assumed par by their respective par value.
Example: 250,000 shares s $5.00 par value = $1,250,000
Add the results of #2 and #3 above. The result is your assumed par value capital.
Example: $2,061,856 plus 1,250,000 = $3,311 956 assumed par value capital.
Figure your tax by dividing the assumed par value capital, rounded up to the next million if it is over $1,000,000, by 1,000,000 and then multiply by $250.00.
Example: 4 x $250.00 = $1,000.00
