Franchise taxes are levied on businesses that gain a franchise right of doing business in a jurisdiction’s territory. The data in Table 1.10 are franchise tax revenues in the city of Sunbelt, Florida, from Year 1 to Year 9.

During forecasting, you are informed that BellSouth’s (the local telephone service provider) current franchise contract with the city ends in Year 11.

The city will seek a 10 percent franchise tax increase from the previous year basis from BellSouth in Year 12 (as the result of a change in the tax base).

The franchise tax receipts from BellSouth during the last nine years are shown

in Table 1.11. Forecast the franchise tax revenues of Years 10 to 12. Write a report on your forecast.

Transcribed Image Text:

Table 1.10 Franchise Taxes in Sunbelt Year Revenues ($) 123456788 9 12,442,000 12,427,000 13,091,000 13,743,000 14,306,000 15,089,000 15,257,000 16,749,000 17,655,000