Use the Corporate Income Tax information above to answer this question. A corporation has a taxable income of $3,502,936. At this income level, the federal income rate is 54%, the state tax rate is 20%, and the local tax rate is 14%. If each tax rate is applied to the the total taxable income, the company would have to pay $3,502,936 * 0.14 in local taxes. Luckily for the corporation, the taxes paid are deducted as described above. How much is paid in local taxes if the customary deductions are taken into consideration? Round to the nearest dollar.
Use the Corporate Income Tax information above to answer this question. A corporation has a taxable income of $3,502,936. At this income level, the federal income rate is 54%, the state tax rate is 20%, and the local tax rate is 14%. If each tax rate is applied to the the total taxable income, the company would have to pay $3,502,936 * 0.14 in local taxes. Luckily for the corporation, the taxes paid are deducted as described above. How much is paid in local taxes if the customary deductions are taken into consideration? Round to the nearest dollar.
Chapter24: Multistate Corporate Taxation
Section: Chapter Questions
Problem 29P
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7
Transcribed Image Text:Corporate Income Tax
A corporation's taxable income is taxed at the federal, state, and
local levels. It is customary for an agency to deduct the taxes
paid to the other agencies before computing the company's tax
liability. For example, the federal taxes are based on the income
that remains after the state and local taxes are deducted.
Similarly, the state taxes are based on the income that remains
after federal and local taxes are deducted; the local taxes are
based on the income that remains after state and federal taxes
are deducted.
Transcribed Image Text:Use the Corporate Income Tax information above to answer
this question.
A corporation has a taxable income of $3,502,936. At this
income level, the federal income rate is 54%, the state tax rate is
20%, and the local tax rate is 14%. If each tax rate is applied to
the the total taxable income, the company would have to pay
$3,502,936 * 0.14 in local taxes. Luckily for the corporation, the
taxes paid are deducted as described above. How much is paid
in local taxes if the customary deductions are taken into
consideration?
Round to the nearest dollar.
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