Use the Corporate Income Tax information above to answer this question. A corporation has a taxable income of $2,712,406. At this income level, the federal income rate is 49%, the state tax rate is 16%, and the local tax rate is 10%. If each tax rate is applied to the the total taxable income, the company would have to pay $2,712,406 * 0.10 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 $2,712,406. At this income level, the federal income rate is 49%, the state tax rate is 16%, and the local tax rate is 10%. If each tax rate is applied to the the total taxable income, the company would have to pay $2,712,406 * 0.10 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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L7
Transcribed Image Text:Use the Corporate Income Tax information above to answer this question.
A corporation has a taxable income of $2,712,406. At this income level, the
federal income rate is 49%, the state tax rate is 16%, and the local tax rate is
10%. If each tax rate is applied to the the total taxable income, the company
would have to pay $2,712,406 * 0.10 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.
tA
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.
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