Corporate Tax in Muscle Shoals, Alabama
In Muscle Shoals, 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 Muscle Shoals, 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 Muscle Shoals, 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%.
In Alabama the corporate tax rate probably differs from the individual tax rate as well. In many states, policymakers have determined that the local economy benefits most when it is business-friendly. In those states, the corporate tax rate is normally lower than the individual income tax rate, unlike the federal system, where the corporate tax rate is higher.
Whatever a company's legal tax rate is, all corporations in Muscle Shoals, Alabama must pay the taxes assessed against them. If they don't, they can be made to pay very considerable fines - typically much larger than their original tax bill.
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How Can a Muscle Shoals, Alabama Corporate Tax Lawyer Help?
Most larger corporations have lawyers and accountants who ensure that they are in full compliance with both state and federal tax law.
Of course, smaller companies in Muscle Shoals can't afford to have full-time legal and accounting departments on their payroll. Accordingly, if your business is organized as a corporation, and has an issue with its taxes, it's imperative that you contact a Muscle Shoals, Alabama tax attorney as soon as possible.