CORPORATE INCOME TAX APPLIES TO WHAT, GROSS PROFIT, OPERATING PROFIT, OR EBIT ?

I’m asking this since i’ve seen income matter of companies that have been in detriment as well as still profitable tax. How can the association be taxed if it’s in detriment ?
please additionally allude to internet references

{ 3 comments… read them below or add one }

Codys mom April 16, 2010 at 7:11 pm

I would guess the reason would be they had income from sales so anytime there is a sale, they have to pay tax. even though the bottom ends in a loss.

avataz_99 April 16, 2010 at 7:24 pm

Well, I can tell you that in the state of NJ, states taxes are based on gross receipts, not net. Some other states have minimum liabilities as well.

zornundox April 16, 2010 at 7:50 pm

Federal corporate income tax is paid on taxable income at the federal level. If you’re seeing income statements, they’re prepared using Generally Accepted Accounting Principles in the United States which is not prepared the same as for taxes. A company can have a loss for financial statement purposes but still have taxable income due to book/tax differences.

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