Corporate Income and Privilege Tax Registration

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.

Alabama

Corporation

Agency:Alabama Department of Revenue
Form:

Initial Business Privilege Tax Return

Notes:

File an initial business privilege tax return within 2.5 months after the date of incorporation or qualification to register for the privilege tax.

Fact Checked:4/7/17

LLC

Agency:Alabama Department of Revenue
Form:

Initial Business Privilege Tax Return

Notes:

File an initial business privilege tax return within 2.5 months after the date of incorporation or qualification to register for the privilege tax.

Fact Checked:4/7/17

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

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

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

Corporation

Not required



There is no need to register with the Franchise Tax Board.

More information: California Franchise Tax Board

LLC

Not required



More information: California Franchise Tax Board

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.

More information: Colorado Department of Revenue

Connecticut

Corporation

Agency:Connecticut Department of Revenue Services
Filing Method:

Online

Notes:

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.

Fact Checked:4/7/17

LLC

Agency:Connecticut Department of Revenue Services
Filing Method:

Online

Notes:

Register using the relevant section of the business taxes registration application.

Fact Checked:4/7/17

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

District of Columbia

Corporation

Agency:District of Columbia Office of Tax and Revenue
Form:

FR-500: New Business Registration

Notes:

Register using the FR-500 application or online system.

Fact Checked:4/7/17

LLC

Agency:District of Columbia Office of Tax and Revenue
Form:

FR-500: New Business Registration

Notes:

Register using the FR-500 application or online system.

Fact Checked:4/7/17

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

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

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

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

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

Corporation

Not required



No separate registration is required for corporate income tax, but entities may need to register before filing for other taxes.

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

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.

More information: Iowa Department of Revenue

Kansas

Corporation

Agency:Kansas Department of Revenue
Form:

Form CR-16: Business Tax Application

Notes:

Register using form CR-16 and completing the required sections.

Fact Checked:4/7/17

LLC

Agency:Kansas Department of Revenue
Form:

Form CR-16: Business Tax Application

Notes:

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.

Fact Checked:4/7/17

Kentucky

Corporation

Agency:Kentucky Department of Revenue
Form:

Kentucky Tax Registration Application

Notes:

Register using the consolidated tax application or online.

Fact Checked:4/7/17

LLC

Agency:Kentucky Department of Revenue
Form:

Kentucky Tax Registration Application

Notes:

Register using the consolidated tax application or online.

Fact Checked:4/7/17

Louisiana

Corporation

Agency:Louisiana Department of Revenue
Filing Method:

Online

Notes:

Register through the online system to set up tax accounts.

Fact Checked:4/7/17

LLC

Agency:Louisiana Department of Revenue
Filing Method:

Online

Notes:

LLCs may be required to file a partnership return and should register through the online system.

Fact Checked:4/7/17

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

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

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

Michigan

Corporation

Agency:Michigan Department of Treasury
Form:

Form 518: Michigan Business Taxes Registration

Notes:

Corporations must register for Corporate Income Tax using either form 518 or the online system to register.

Fact Checked:4/7/17

LLC

Not required



Most LLC types do not file Corporate Income Tax returns, but this depends on their IRS classification.

More information: Michigan Department of Treasury

Minnesota

Corporation

Agency:Minnesota Department of Revenue
Form:

Form ABR: Application for Business Registration

Notes:

Corporations must register before filing corporate franchise tax returns.

Fact Checked:4/7/17

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.

More information: Minnesota Department of Revenue

Mississippi

Corporation

Agency:Mississippi Department of Revenue
Filing Method:

Online

Notes:

Corporations must register before filing corporate income and franchise tax returns.

Fact Checked:4/7/17

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

Missouri

Corporation

Agency:Missouri Department of Revenue
Form:

Form 2643: Tax Registration Application

Notes:

Corporations must register before filing corporate income and franchise tax returns.

Fact Checked:4/7/17

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: Missouri Department of Revenue

Montana

Corporation

Not required



There is no need to register before filing corporate income tax. Other tax types may require registration.

More information: Montana Department of Revenue

LLC

Not required



Most LLC types do not file Corporate Income Tax returns.

More information: Montana Department of Revenue

Nebraska

Corporation

Agency:Nebraska Department of Revenue
Form:

Form 20: Nebraska Tax Application

Notes:

Corporations must register before filing corporate income tax returns.

Fact Checked:4/7/17

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

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

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

Corporation

Agency:New Jersey Department of the Treasury - Division of Taxation
Form:

Form NJ-REG: Business Registration Application

Notes:

Corporations must register before filing corporation business tax returns.

Fact Checked:4/7/17

LLC

Not required



Most LLC types do not file Corporate Business Tax returns but may need to register for other tax types.

More information: New Jersey Department of the Treasury - Division of Taxation

New Mexico

Corporation

Agency:New Mexico Taxation and Revenue Department
Form:

ACD-31015: Application for Business Tax Identification Number

Fact Checked:4/7/17

LLC

Agency:New Mexico Taxation and Revenue Department
Form:

ACD-31015: Application for Business Tax Identification Number

Notes:

Most LLCs will file a pass through entity return, but they must first register for a tax ID.

Fact Checked:4/7/17

New York

Corporation

Not required



There is no need to register before filing a franchise tax return. Other tax types may require registration.

More information: New York State Department of Taxation and Finance

LLC

Not required



Depending on IRS classification, LLCs may not be included in this tax. There is no registration required for Franchise Tax.

More information: New York State Department of Taxation and Finance

North Carolina

Corporation

Not required



No need to register for a Business Income tax account. An account is created after you file a return for the first time.

More information: North Carolina Department of Revenue

LLC

Not required



Most LLC types do not file Corporate Income Tax or Franchise Tax.

More information: North Carolina Department of Revenue

North Dakota

Corporation

Not required



There is no need to register before filing corporate income tax. Other tax types may require registration.

More information: North Dakota Office of State Tax Commissioner

LLC

Not required



Depending on IRS classification, LLCs may not be included in this tax. There is no registration required for Corporate Income Tax.

More information: North Dakota Office of State Tax Commissioner

Ohio

Corporation

Agency:Ohio Department of Taxation
Form:

Form CAT-1: Commercial Activity Tax Registration

Notes:

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.

Fact Checked:4/7/17

LLC

Agency:Ohio Department of Taxation
Form:

Form CAT-1: Commercial Activity Tax Registration

Notes:

The Commerical Activity Tax applies to most business entities in the state of Ohio. You must register first before filing a return.

Fact Checked:4/7/17

Oklahoma

Corporation

Not required



There is no need to register before filing corporate income tax or franchise tax. Other tax types may require registration.

More information: Oklahoma Tax Commission

LLC

Not required



Depending on IRS classification, LLCs may not be included in this tax. There is no registration required for Corporate Income Tax or Franchise Tax.

More information: Oklahoma Tax Commission

Oregon

Corporation

Not required



No need to register for a Business Excise tax account.

More information: Oregon Department of Revenue

LLC

Not required



Most LLC types do not file Corporate Excise Tax or Corporation Income Tax, but some are liable for the Partnership Minimum Tax.

More information: Oregon Department of Revenue

Pennsylvania

Corporation

Not required



No need to register for a Corporate Net Income tax account. An account is created after you file with the Secretary of State.

More information: Pennsylvania Department of Revenue

LLC

Not required



Most LLC types do not file Corporate Net Income Tax.

More information: Pennsylvania Department of Revenue

Rhode Island

Corporation

Not required



There is no need to register before filing business corporation tax. Other tax types may require registration.

More information: Rhode Island Department of Revenue - Division of Taxation

LLC

Not required



Depending on IRS classification, LLCs may not be included in this tax.

More information: Rhode Island Department of Revenue - Division of Taxation

South Carolina

Corporation

Agency:South Carolina Department of Revenue
Form:

SCDOR-111: Business Tax Application

Notes:

Register before filing.

Fact Checked:4/7/17

LLC

Agency:South Carolina Department of Revenue
Form:

SCDOR-111: Business Tax Application

Notes:

Depending on IRS classification, LLCs may not be included in this tax.

Fact Checked:4/7/17

South Dakota

Corporation

Not required



South Dakota does not have a corporate income tax.

More information: South Dakota Department of Revenue

LLC

Not required



South Dakota does not have a corporate income tax.

More information: South Dakota Department of Revenue

Tennessee

Corporation

Agency:Tennessee Department of Revenue
Filing Method:

Online

Notes:

FEIN, Department of Revenue Account Number

Fact Checked:4/7/17

LLC

Agency:Tennessee Department of Revenue
Filing Method:

Online

Notes:

FEIN, Department of Revenue Account Number

Fact Checked:4/7/17

Texas

Corporation

Not required



There is no need to register for franchise tax as this takes place during the incorporation or foreign qualification process.

More information: Texas Comptroller

LLC

Not required



There is no need to register for franchise tax as this takes place during the formation or foreign qualification process.

More information: Texas Comptroller

Utah

Corporation

Agency:Utah State Tax Commission
Notes:

There is no corporate income tax specific registration, but the department uses the business and tax registration application to set up the account.

Fact Checked:4/7/17

LLC

Not required



Depending on IRS classification, LLCs may not be included in this tax.

More information: Utah State Tax Commission

Vermont

Corporation

Not required



There is no need to register before filing business entity or corporate income tax. Other tax types may require registration.

More information: Vermont Department of Taxes

LLC

Not required



There is no need to register before filing business entity or corporate income tax. Other tax types may require registration.

More information: Vermont Department of Taxes

Virginia

Corporation

Agency:Virginia Department of Taxation
Form:

Form R-1: Business Registration Application

Notes:

Corporations can register for Corporate Income Tax using form R-1.

Fact Checked:4/7/17

LLC

Not required



Most LLC types do not file Corporate Income Tax.

More information: Virginia Department of Taxation

Washington

Corporation

Agency:Washington Department of Revenue
Form:

Business License Application

Notes:

Register before filing. Washington does not have a corporate income tax.

Fact Checked:4/7/17

LLC

Agency:Washington Department of Revenue
Form:

Business License Application

Notes:

Register before filing. Washington does not have a corporate income tax.

Fact Checked:4/7/17

West Virginia

Corporation

Agency:West Virginia State Tax Department
Form:

WV/BUS-APP

Filing Method:

Mail or online.

Agency Fee:

$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.

Fact Checked:4/7/17

LLC

Agency:West Virginia State Tax Department
Form:

WV/BUS-APP

Filing Method:

Mail or online.

Agency Fee:

$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.

Fact Checked:4/7/17

Wisconsin

Corporation

Agency:Wisconsin Department of Revenue
Form:

Online

Notes:

Register before filing.

Fact Checked:4/7/17

LLC

Not required



LLCs may need to file depending on their IRS classification.

More information: Wisconsin Department of Revenue

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
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