Corporate income tax, or corporation tax, is a tax that “C corporation” legal entities must pay. Be sure to take full consideration when incorporating your business to ensure that you are properly classified – different classifications of corporation have different taxation rules. In general, if the term “corporation” is used, it can be presumed that it is a C corporation since other types are often identified specifically as such.
Corporations are taxed at both federal and state level. According to statistics from the US Treasury, $444 billion was paid in corporate taxes in the USA in 2017. That comes to one fifth of the $2.2 trillion gained in total taxes. Corporation tax in America is currently regulated by the Tax Cut and Jobs Act, part of the controversial GOP tax reform bill. This act was passed in December 2017, and has been in effect since January 1, 2018.