[wesley s]

bought business name and payed franchise tax last year but not a franchise

[Tax CPA]

The term "Franchise Tax" has nothing to do with an actual Franchise as you're thinking about it. It is really just a state tax that has both a taxable income component and tax on net capital (assets - liabilities). For 2006 all Corporations and LLCs that "do business" in Texas are subject to the franchise tax. Effective 2007, other entities such as General and Limited Partnerships will also be subject to the tax. Texas has no individual income tax, so there is no requirement to file an individual Texas return for income from the Texas pass-thru entity (the LLC). This differs from other States that do not have Franchise tax at the LLC level, but would tax that income at the individual level. However, for Federal income tax purposes you will have to report the LLC income on your individual return because it was not taxed at the LLC level.

[franchisegod.com]

its better if we consult with a lawyer