Corporate Income Tax Law and Legal Definition

Corporations may be taxed at both the federal and state levels. Federal tax laws establish a tax rate and tax forms specifically applicable to for corporate income. Corporations with gross assets of more than $50 million that also file at least 250 returns a year are required to electronically file their returns starting in 2006 (for 2005 tax year returns) under new Treasury Regulations.

State corporate income tax laws vary by state, so local laws should be consulted for the specific requirements in your area. Corporations and artificial entities that conduct business, or earn or receive income in the state, including out-of-state corporations, may be required to file a state corporate income tax return unless specifically exempted by law. The return generally must be filed, even if no tax is due. Sole proprietorships, individuals, estates of decedents, and testamentary trusts are often exempted and are not required to file a state return.