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Applying for state tax IDs & tax exemption certificates
Registering for corporate income and privilege tax accounts is a requirement for many businesses.
Nonprofits that are tax exempt on the federal level are often eligible to apply for exemption from these
taxes. State tax authorities penalize companies that do not comply with the laws to register for and pay
corporate income tax. This guide summarizes the key concepts involved in obtaining tax identification
(ID) numbers, applying for exemption certificates, and maintaining corporate income tax compliance.
Introduction to Corporate Income & Privilege Tax
Corporate income tax is a tax on the net income of corporations. In most cases, only corporations are
subject to this tax.
Privilege taxes are imposed on businesses for the right to conduct business in a given state. Privilege
taxes are usually based on the gross receipts or net worth of a business, but some are levied as a flat
fee. States often use terms like franchise tax, business entity tax, or business and occupation tax to
refer to their local privilege tax. Some states have privilege taxes that apply to very specific groups
of businesses, such as banks or other financial institutions, but this guide does not cover those taxes.
Exemptions from corporate income and privilege tax are frequently available to nonprofits that are
federally exempt from income tax. While in some jurisdictions your organization must expressly apply for
an exemption, in others your organization is automatically exempt upon receiving federal exemption.
Nexus is the technical term for when an entity is legally subject to certain taxes in a given state. The
definition varies by governing authority, but in general it is a good idea to review corporate income
and privilege tax nexus when:
You set up your business.
You open a physical location in a new state.
You hire an employee or contractor in a new state.
You partner with an affiliate in a new state.
You store products, distribute products, or work with a drop-shipper in a new state.
Your company changes its business structure (e.g. LLC to corporation)
Where Corporate Income & Privilege Tax is Levied
All states except for South Dakota and Wyoming subject businesses to a combination of corporate income
and privilege taxes. Forty four states and the District of Columbia currently impose corporate income
taxes on corporations, while seventeen states levy broadly applicable privilege taxes.
Not all corporate taxes are levied or administered by the state. Some cities and counties levy general
business privilege taxes on entities located within their jurisdiction. This requirement is most
commonly held in heavily populated cities or counties.
Registering to File Corporate Income and Privilege Taxes
In each jurisdiction where registration is required, the entity applies for a tax ID, pays estimated
income taxes per the required schedule, and files a corporate tax return at the end of the year.
Although almost every state has a corporate income or privilege tax, relatively few states require
registration prior to filing a return.
Currently only twenty states require registration before a business files its first income tax return.
After registration, entities are issued a department of revenue identification number. Ohio and
Pennsylvania, however, issue an ID that is specific to the corporate income tax account. States that do
not require registration simply use the federally issued employer identification number to track
businesses.
Getting Corporate Income and Privilege Tax Exemption Certificates
In many states, nonprofits are automatically exempt from corporate income and privilege taxes after
receiving their IRS determination letter. Seventeen states and the District of Columbia, however,
require nonprofits to submit an application or supporting documentation before an exemption is granted.
Nonprofits should not assume they are exempt from paying corporate income and privilege taxes. The chart
below outlines each state-level process for obtaining exemption.
File an initial business privilege tax return within 2.5 months after the date of incorporation or qualification to register for the privilege tax.
Alaska
Alaska
Corporation
Not required
There is no need to register before filing corporation income tax.
More information: Alaska Department of Revenue
LLC
Not required
LLCs will typically file partnership income tax, but this depends of how the IRS classifies them. There is no need to register before filing partnership income tax.
More information: Alaska Department of Revenue
Arizona
Arizona
Corporation
Not required
There is no separate registration for corporate income tax.
More information: Arizona Department of Revenue
LLC
Not required
LLCs will typically file partnership income tax, but this depends of how the IRS classifies them. There is no separate registration for partnership tax.
More information: Arizona Department of Revenue
Arkansas
Arkansas
Corporation
Not required
There is no need to register before filing a corporation income tax return. The secretary of state administered franchise tax also does not require registration.
More information: Arkansas Department of Finance and Administration
LLC
Not required
Most LLCs do not file Corporate Income Tax returns. The secretary of state administered franchise tax also does not require registration.
More information: Arkansas Department of Finance and Administration
California
California
Corporation
Not required
There is no need to register before filing a corporate income tax or franchise tax return.
More information: California Franchise Tax Board
LLC
Not required
There is no need to register before filing a franchise tax return.
More information: California Franchise Tax Board
Colorado
Colorado
Corporation
Not required
There is no need to register for a Business Income tax account.
More information: Colorado Department of Revenue
LLC
Not required
Most LLCs will file form 106, Business Income Tax Return for Pass-Through Entities, to confirm that income is taxed individually. There is no need to register for an Income tax account, you are automatically registered upon submitting a return for the first time.
Register using the relevant section of the business taxes registration application. Corporations must register for either the corporation business tax or business entity tax but not both. Generally C Corporations file corporation business tax while S Corporations file business entity tax.
Register using the relevant section of the business taxes registration application.
Delaware
Delaware
Corporation
Not required
There is no corporate income tax specific registration, but most entities will need to file a combined registration application. There is no registration for the department of state administered franchise tax.
More information: Delaware Department of Finance - Division of Revenue
LLC
Not required
Most LLC types do not file Corporate Income Tax returns. There is no registration for the department of state administered franchise tax.
More information: Delaware Department of Finance - Division of Revenue
Register using the FR-500 application or online system.
Florida
Florida
Corporation
Not required
There is no need to register for a Business Income tax account.
More information: Florida Department of Revenue
LLC
Not required
Some LLCs will need to file a partnership information return. There is no registration required before making this filing.
More information: Florida Department of Revenue
Georgia
Georgia
Corporation
Not required
No separate registration is required for corporate income or net worth tax, but entities may need to register before filing for other taxes.
More information: Georgia Department of Revenue
LLC
Not required
LLCs will typically file partnership income tax, but this depends of how the IRS classifies them. There is no separate registration required for partnership income tax.
More information: Georgia Department of Revenue
Hawaii
Hawaii
Corporation
Not required
There is no separate registration for corporate income tax or franchise tax, but entities will need to register for a tax ID before filing a return. Only banks and financial institutions are required to file franchise taxes.
More information: Hawaii Department of Taxation
LLC
Not required
There is no separate registration for partnership income tax, but entities will need to register for a tax ID before filing a return.
More information: Hawaii Department of Taxation
Idaho
Idaho
Corporation
Not required
Entities are not subject to both franchise tax and corporate income tax. There is no separate registration required for corporate income or franchise tax.
More information: Idaho State Tax Commission
LLC
Not required
LLCs will typically file partnership income tax, but this depends of how the IRS classifies them. There is no separate registration required for partnership income tax.
More information: Idaho State Tax Commission
Illinois
Illinois
Corporation
Not required
There is no separate registration required for business income tax, but firms should use the business registration application to register with the department.
More information: Illinois Department of Revenue
LLC
Not required
LLCs will typically file a partnership income tax return, but this depends of how the IRS classifies them. There is no separate registration required for business income tax, but firms should use the business registration application to register with the department.
More information: Illinois Department of Revenue
Indiana
Indiana
Corporation
Not required
Corporate Income Tax accounts are created by filing an initial return. When filing your first return, check the "Initial Return" box on Form IT-20, and an account will be created for your entity.
More information: Indiana Department of Revenue
LLC
Not required
LLCs will typically file partnership income tax, but this depends of how the IRS classifies them. There is no separate registration required for partnership income tax.
More information: Indiana Department of Revenue
Iowa
Iowa
Corporation
Not required
There is no need to register for a Business Income tax account.
More information: Iowa Department of Revenue
LLC
Not required
LLCs will typically file partnership income tax, but this depends of how the IRS classifies them. There is no separate registration required for partnership income tax.
Register using form CR-16 and completing the required sections. LLCs will typically file partnership income tax, but this depends of how the IRS classifies them.
LLCs may be required to file a partnership return and should register through the online system.
Maine
Maine
Corporation
Not required
There is no need to register before filing corporate income tax. Other tax types may require registration.
More information: Maine Revenue Services
LLC
Not required
There is no need to register before filing corporate income tax. Other tax types may require registration.
More information: Maine Revenue Services
Maryland
Maryland
Corporation
Not required
There is no need to register before filing corporate income tax. Other tax types may require registration.
More information: Comptroller of Maryland
LLC
Not required
There is no need to register before filing corporate income tax. Other tax types may require registration. LLCs may be required to file a pass through entity return.
More information: Comptroller of Maryland
Massachusetts
Massachusetts
Corporation
Not required
There is no separate registration for corporate excise tax, but corporations may need to register for other taxes.
More information: Massachusetts Department of Revenue
LLC
Not required
Most LLC types do not file Corporate Excise Tax returns.
More information: Massachusetts Department of Revenue
Corporations must register before filing corporate franchise tax returns.
LLC
Not required
Most LLC types do not file Corporate Franchise Tax returns, but this depends on their IRS classification. LLCs may also be required to pay the Minimum Fee. If either of these taxes apply, the LLC will need to register.
Corporations must register before filing corporate income and franchise tax returns.
LLC
Not required
Most LLC types do not file Corporate Income or Franchise Tax returns, but this depends on their IRS classification. If either of these taxes apply, the LLC will need to register.
More information: Mississippi Department of Revenue
Corporations must register before filing corporate income and franchise tax returns.
LLC
Not required
Most LLC types do not file Corporate Income, Franchise Tax, or Partnership Tax returns, but this depends on their IRS classification. If any of these taxes apply, the LLC will need to register.
Corporations must register before filing corporate income tax returns.
LLC
Not required
Most LLC types do not file Corporate Income, Franchise Tax, or Partnership Tax returns, but this depends on their IRS classification. If any of these taxes apply, the LLC will need to register.
More information: Nebraska Department of Revenue
Nevada
Nevada
Corporation
Not required
Entities that file with the Secretary of State are automatically registered for commerce taxes.
More information: Nevada Department of Taxation
LLC
Not required
Entities that file with the Secretary of State are automatically registered for commerce taxes. LLCs are liable to pay commerce tax.
More information: Nevada Department of Taxation
New Hampshire
New Hampshire
Corporation
Not required
There is no need to register for a Business Income tax account, this happens automatically upon filing the first return. Business entities are generally required to file both Business Entity Taxes and Business Profit Taxes.
More information: New Hampshire Department of Revenue Administration
LLC
Not required
There is no need to register for a Business Income tax account, this happens automatically upon filing the first return. Business entities are generally required to file both Business Entity Taxes and Business Profit Taxes.
More information: New Hampshire Department of Revenue Administration
New Jersey
New Jersey
Corporation
Agency:
New Jersey Department of the Treasury - Division of Taxation
The Commerical Activity Tax applies to most business entities in the state of Ohio. You must register first before filing a return. There is no registration for corporation franchise tax.
$30 registration fee unless the applicant is a nonprofit, foreign retailer, government agency, or only applying for a withholding account or agricultural/farming account.
Notes:
Register before filing. Only public service companies need to file business and occupation taxes.
$30 registration fee unless the applicant is a nonprofit, foreign retailer, government agency, or only applying for a withholding account or agricultural/farming account.
Notes:
LLCs may need to file depending on their IRS classification.
LLCs may need to file depending on their IRS classification.
More information: Wisconsin Department of Revenue
Wyoming
Wyoming
Corporation
Not required
Wyoming does not have a corporate income tax.
More information: Wyoming Department of Revenue
LLC
Not required
Wyoming does not have a corporate income tax.
More information: Wyoming Department of Revenue
Filing Fees
Filing fees depend on your individual situation. We do our best to calculate your filing fees
upfront and collect those fees today so we can get started. Your specialist will determine your
exact filing fees and invoice additional fees if required.
