Corporate Tax in Opelika, Alabama
In Opelika, Alabama, a "corporation" is defined as a legal entity that's separate from its owners. Thus, from a legal standpoint, the owner of a corporation and the corporation itself are not the same "person."
This doctrine is identified as "corporate personhood." While the concept is somewhat abstract, the law of Alabama treats corporations as individual persons, for most purposes. This means that, legally, corporations have many of the same rights, privileges, and obligations as living, breathing human beings.
As a prime example, corporations have to pay income taxes, just as a person would.
Corporate Tax Rate in Opelika, Alabama
Every corporation in the United States is required to pay federal income tax. Most states also have a corporate income tax, which corporations doing business in Opelika, Alabama are required to pay.
At the federal level, and in some states, corporations are taxed at different rates from individuals. Federally, the top corporate tax rate is 35% - a rate applying to corporations earning more than $18.3 million per year. Corporations earning less than $50,000 a year pay a 15% corporate tax rate, and there are a few tax brackets in between. For comparison, the federal income tax for individuals maxes out at 33%.
The corporate tax rate in Alabama may also differ from the individual tax rate. However, in many states, the corporate tax rate is lower than the individual income tax rate. This is because many states believe that the best way to attract business (and consequently improve their economies) is to have a low corporate tax rate.
Whatever their legal tax rate, all corporations in Opelika, Alabama are required to comply with state and federal income tax laws. Failure to pay income tax can be punished by massive fines, which can sometimes prove financially ruinous.
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How Can a Opelika, Alabama Corporate Tax Lawyer Help?
The majority of big corporations have accountants, tax lawyers, and other legal/financial specialists on staff to ensure that they comply with state and national corporate tax laws.
However, if you are the owner of a smaller corporation in Opelika, you probably can't afford a full-time in-house lawyer. For that reason, you should contact an attorney in Opelika, Alabama who practices tax law, on an as-needed basis, if you ever encounter a corporate tax issue, such as an audi