FAQs - Corporation Franchise Tax

Did the nonrefundable franchise tax credits convert to credits against the commercial activity tax (CAT) after the franchise tax phase-out?

Most nonrefundable franchise tax credits were not recoverable against the CAT and therefore taxpayers could not claim their unused nonrefundable franchise tax credit carry forward as a credit against the CAT. However, three nonrefundable credits converted to nonrefundable CAT credits following the 2008 franchise tax report, which was the last report year that these three credits could have been claimed against the franchise tax (for those taxpayer’s subject to the franchise tax phase-out).

For those taxpayers not subject to the franchise tax phase-out and the CAT phase-in, these credits continue under the franchise tax.

Please refer to the corporation franchise tax instructions which can be located on our Tax Forms home page for more detailed information.