FAQ: Business - Franchise Tax Questions
Who files and pays franchise tax?
For-profit corporations that do business in the State of Oklahoma are required to file and pay franchise tax. This includes subchapter-S corporations as well as regular corporations. Not-for-Profit corporations are not required to file franchise tax; however, Foreign Not-for-Profit corporations are still required to pay the $100.00 registered Agents fee. LLCs are statutorily exempt from franchise tax.
How is Franchise Tax calculated?
The franchise tax is calculated at the rate of $1.25 for each $1,000.00 of capital employed in or apportioned to Oklahoma. Only those corporations with capital of $201,000.00 or more are required to remit the franchise tax. The maximum amount of franchise tax that a corporation may pay is $20,000.00. Corporations must still file an annual franchise tax return even if their tax liability is zero. Foreign corporations (corporations domiciled outside Oklahoma) are also required to pay a $100.00 registered agents fee even if they have no franchise tax liability.
When is franchise tax due?
Franchise tax is due each year on July 1st unless the corporation has elected to change its filing period to match their corporation’s fiscal year. This election must be made prior to July 1st on the state’s online filing system (OkTAP) or in writing by submitting Form 200F prior to July 1st. If a corporation makes an extension for the purpose of filing their income tax, the filing period for franchise tax is also extended. However, as with income tax, this does not extend the due date for payment of the franchise tax.
What are the penalties for filing franchise tax late?
A penalty of 10% of the tax due along with interest accruing at the rate of 1.25% per month is assessed if the franchise tax is not remitted by September 15th. For those corporations that have elected to file on a different fiscal year, penalty and interest will begin to accrue on the 15th day of the third month following the close of their fiscal year. For example, a filer would be assessed penalty and interest starting on March 15th if they have a year end of December 31st.
How do I get a Letter of Good Standing and how do I reinstate a corporation?
The Oklahoma Tax Commission can issue a Letter of Good Standing upon verification that the corporation is in compliance with franchise tax filings, payments and registered agents fees. A corporation can be reinstated upon verification that all required franchise tax filings, payments and registered agents fees are current. In addition, a onetime $15.00 reinstatement fee is required.
How may I get a list of officers or correct an officer list?
The Taxpayer Assistance Division can provide a list of officers for a registered corporation. As well, updated information as to corrected officers can also be provided to the division.
Can I file and pay my franchise tax return electronically?
When do I file my form 200F Request to Change Franchise Tax Filing Period?
You must file form 200F no later than July 1st. Once you have filed, you do not have to file again unless you wish to change the filing period. Form 200F can be filed through OKTAP or you can download the form from our website.
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