A corporation has a taxable income of $7,356,401. At this income level, the federal income rate is 46%, the state tax rate is 21%, and the local tax rate is 13%. If each tax rate is applied to the the total taxable income, the resulting tax liability for the corporation would be (46 + 21 + 13)%. Luckily for the corporation, the taxes paid are deducted as described above. What is the tax liability (as a percentage of taxable income) if the customary deductions are taken into consideration?
A corporation has a taxable income of $7,356,401. At this income level, the federal income rate is 46%, the state tax rate is 21%, and the local tax rate is 13%. If each tax rate is applied to the the total taxable income, the resulting tax liability for the corporation would be (46 + 21 + 13)%. Luckily for the corporation, the taxes paid are deducted as described above. What is the tax liability (as a percentage of taxable income) if the customary deductions are taken into consideration?
%. Round to the nearest tenth of a percent (one decimal place).
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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