![]() ![]() ![]() Though often thought of as a major tax type, corporate income taxes account for an average of just 4.73 percent of state tax collections and 2.27 percent of state general revenue. Unlike a sales tax, a gross receipts tax is assessed on businesses and apply to business-to-business transactions in addition to final consumer purchases, leading to tax pyramiding.Ĭorporate income taxes are levied in 44 states. South Dakota and Wyoming are the only states that do not levy a corporate income or gross receipts tax A gross receipts tax, also known as a turnover tax, is applied to a company’s gross sales, without deductions for a firm’s business expenses, like costs of goods sold and compensation.Gross receipts taxes are generally thought to be more economically harmful than corporate income taxes. Nevada, Ohio, Texas, and Washington impose gross receipts taxes instead of corporate income taxes.Ten states- Arizona, Colorado, Florida, Kentucky, Mississippi, Missouri, North Carolina, North Dakota, South Carolina, and Utah-have top rates at or below 5 percent. ![]() Six states- Alaska, Illinois, Iowa, Minnesota, New Jersey, and Pennsylvania-levy top marginal corporate income tax A tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities.Rates range from 2.5 percent in North Carolina to 12 percent in Iowa. Many companies are not subject to the CIT because they are taxed as pass-through businesses, with income reportable under the individual income tax. Forty-four states levy a corporate income tax A corporate income tax (CIT) is levied by federal and state governments on business profits. ![]()
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