In most cases, franchise and excise taxes paid by businesses are deductible as ordinary and necessary business expenses for federal income tax purposes. According to the IRS Publication 535, you can deduct franchise taxes as a business expense, as long as they are paid for carrying on a trade or business. Similarly, excise taxes that are ordinary and necessary expenses in carrying on a trade or business are generally deductible. However, there may be exceptions and limitations, so it’s advisable to consult a tax professional or the IRS guidelines.
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