background image

Retained

  • Statutory Tax Rate 21
  • Surtax Based on Taxable Income 0
  • Surtax Based on Statutory Tax 0
  • Surtax Deductible from Taxable Income 7.25
  • Statutory Tax Deductable 0
  • Effective Tax Rate 26.7275

Statutory Tax Rate

For taxable years beginning after 31 December 2017, a flat federal corporate tax rate of 21% replaces the prior progressive rates. In addition, the corporate alternative minimum tax (AMT) is eliminated, with AMT credit carryovers available to offset regular corporate tax. The AMT credit is also refundable for any taxable year beginning after 2017 and before 2022 in an amount equal to 50% (100% in the case of taxable years beginning in 2021) of the excess of the AMT credit for the taxable year over the amount of the credit allowable for the year against regular tax liability. As such, the full amount of the AMT credit will be allowed in taxable years beginning before 2022.

Further to the federal rate, most US states impose corporate income taxes. The state taxes are in the approximate range of 2% to 12% and are deductible for federal corporate tax purposes.

Surtax Deductible from Taxable Income

The default surtax rate shown is the New York State tax rate - 7.25% (increased from 6.5% for corporate taxpayers with a business income base of more than USD 5 million for the period 1 January 2021 until 1 January 2024).

State Taxes- Alabama - 6.5%, Alaska - 9.4%, Arizona - 4.9%, Arkansas – 5.9% (reduced from 6.2% effective 1 January 2022), California - 8.84%, Colorado - 4.63%, Connecticut - 7.5% plus tax of 3.1 mills per dollar of value of capital stock and surplus, Delaware - 8.7%, District of Columbia - 9.00%, Florida - 5.5% (increased from 3.535% effective 1 January 2022), Georgia - 5.75% (reduced from 6% effective January 2019), Hawaii - 6.4%, Idaho – 6% (reduced from 6.5% effective 1 January 2022), Illinois - 9.5%, Indiana - 4.9% (reduced from 5.25% effective 1 July 2021), Iowa - 9.8% (reduced from 12% effective 1 January 2021), Kansas - 7%, Kentucky - 5% (reduced from 6%), Louisiana - 8%, Maine - 8.93%, Maryland - 8.25%, Massachusetts - Maximum rate 8% plus additional tax of USD 2.60 per USD 1,000 of taxable tangible personal property or taxable net worth, Michigan - 6%, Minnesota - 9.8%, Mississippi - 5%, Missouri - 4% (reduced from 6.25% effective 1 January 2020), Montana - 6.75%, Nebraska - 7.5% (reduced from 7.81% effective 1 January 2022), Nevada - Corporate income tax not imposed, New Hampshire - 7.6% (reduced from 7.7% effective 1 January 2022), New Jersey - 11.5% (increased until 1 January 2023), New Mexico – 7.6% (increased from 6.20% effective 1 January 2022), New York - 7.25%, North Carolina - 2.5% (scheduled to be reduced to 2.25% in 2025, 2% in 2026, 1% in 2028 until phased out to 0% after 2029), North Dakota - 4.31%, Ohio - Commercial Activity Tax (CAT) of 2.6 mills per dollar, Oklahoma - 4% (reduced from 6% effective 1 January 2022), Oregon - 7.6%, Pennsylvania - 9.99%, Rhode Island - 7%, South Carolina - 5%, South Dakota - Corporate income tax not imposed, Tennessee - 6.5%, Texas - Business margin tax of 0.75% of taxable margin (0.375% if primarily engaged in retail or wholesale trade), Utah – 4.85% (reduced from 4.95% effective 1 January 2022), Vermont – 8.5%, Virginia – 6%, Washington – Corporate income tax not imposed, West Virginia – 6.5%, Wisconsin – 7.9%, Wyoming – Corporate income tax not imposed.