This is akin to a franchaise tax. I'm pretty sure the thinking of the legislators is taxing net income is too easily manipulated. Therefore by taxing a 'small

This is akin to a franchaise tax. I'm pretty sure the thinking of the legislators is taxing net income is too easily manipulated. Therefore by taxing a 'small' (up for debate) amount of revenues there's less gamesmanship that can take place when determining tax liability. For reference, Texas charges a 1% tax on taxable margin over $1M with three options for determining taxable margin. This gives companies less wiggle room when determining tax liability