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Income and franchise tax services

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Managing state and local income tax and franchise tax complexity

State and local income tax is imposed by jurisdictions on business income earned within their boundaries.

Franchise tax is levied by certain states for the privilege of operating or being chartered in that state, often based on revenue, capital or net worth rather than income.

While income tax is based on profits, franchise tax may apply regardless of profitability and is calculated using alternative bases such as revenue or capital. Businesses may be subject to both taxes, each with different rules and filing requirements.

Managing these taxes becomes complex, requiring businesses to:

Without the right strategy, these challenges can lead to errors, penalties and missed opportunities.

RSM helps businesses manage state and local income tax and franchise tax obligations through planning, compliance and multistate tax support. We work with your team to streamline reporting, reduce risk and improve efficiency across jurisdictions.

Why choose RSM for state income and franchise tax services

RSM brings extensive experience navigating complex state and local income tax and franchise tax regulations across the nation. Our professionals understand evolving legislation and apply practical solutions to help businesses stay current and confident.

We focus on the needs of middle market organizations, delivering hands-on, tailored support that aligns with your operations, resources and growth objectives.

State and local income tax and franchise tax services

Explore how RSM supports income and franchise tax compliance, planning, and risk management across jurisdictions.

Audit defense and controversy

RSM supports businesses through audits and disputes with state tax authorities. We help manage risk, respond to notices and resolve controversies efficiently to minimize disruption.

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Credit identification and incentives

We identify state tax credits and incentives that can reduce tax liability and improve cash flow. Our team helps ensure you capture all available opportunities across jurisdictions.

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Income and franchise tax evaluation, compliance and planning
RSM evaluates your tax position, manages compliance and develops strategies to improve efficiency. We help ensure accurate filings while aligning tax processes with your business operations.
Multistate credits and incentives

Our team analyzes multistate credit opportunities to help you maximize benefits across jurisdictions. We support proper documentation and alignment with evolving tax regulations.

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Nexus analysis and voluntary disclosure
We assess where your business has tax obligations and support voluntary disclosure agreements to reduce exposure. This helps mitigate penalties and bring operations into compliance.
Reverse income tax audit
RSM reviews prior tax filings to identify overpayments and uncover refund opportunities. Our approach helps recover value and improve future tax accuracy.
Tax planning and strategy

We develop tailored tax strategies that align with your business goals. Our proactive planning helps reduce risk, improve efficiency and support long-term growth.

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Frequently asked questions

What are the trends in state and local income tax?
Businesses are seeing increased scrutiny, evolving nexus rules and more complex apportionment requirements across states.
How can businesses align state tax compliance with broader tax strategy?
Aligning compliance with overall tax planning helps reduce risk, improve efficiency and ensure consistent reporting across jurisdictions.
How can businesses manage income and franchise tax compliance across multiple states?
A centralized approach supported by tax specialists and technology helps streamline filings and manage varying state requirements.
Is franchise tax considered an income tax?
No. Franchise tax is typically based on revenue, capital or net worth—not income—and may apply even if a business is not profitable.
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