Franchise tax rates are determined by individual state laws and regulations. Each state has its own formula for calculating the franchise tax, which may be based on factors such as the company’s net worth, capital stock, or a flat rate. Some states also offer exemptions or credits for certain types of businesses. For federal excise taxes, the rates are set by the Internal Revenue Code and periodically adjusted by Congress. The rates can vary depending on the type of good or activity being taxed, and they may be based on units (e.g., per gallon) or a percentage of the price.
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