Corporate Income Taxes

Corporate taxable income is defined as follows:

taxable income = gross income (revenues)

- (cost of goods sold + depreciation + operating expenses)

Once taxable income is calculated, income taxes are determined by income taxes = (tax rate) x (taxableincome)

The corporate tax rate structure for 1996 is relatively simple. There are four basic rate brackets (ranging from 15 to 35%) plus two surtax rates (5 and 3%) based on taxable incomes, and businesses with lower taxable incomes continue to be taxed at lower rates than those with higher taxable incomes.

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