Tax on the income of those organizations treated as corporations for the purpose of taxation is known as corporate tax. Just like individuals, corporate are also required to submit their tax returns every year. In the United States, the corporate tax law governs these taxes. These taxes are imposed by the federal government, state governments as well as the local governing bodies.
Shareholders are taxed differently. They are taxed on the basis of the amount distributed to them as dividend.
According to corporate tax law, companies have to pay corporate tax in advance, in installments based on income estimates of the company.
Corporate tax law in states varies from state to state. Also, state laws do not allow for any deductions. In addition, any tax treaties between states do not apply to corporate taxes.
Corporations in the U.S. can get tax credits which will result in lower tax payments. One such tax credit is the federal foreign tax credit. There are also credits for specific wage payments, credit related to use of natural resources etc.
The tax returns to be submitted in accordance with corporate tax law can be quite complicated. The returns have to be filed on time and without error to avoid penalty. Errors committed intentionally when filing tax returns will attract criminal penalty.