A state corporate income tax is a tax that companies pay to a state for doing business in that particular state. The taxes help to subsidize the actual cost of letting companies do business in those states. Wyoming, Nevada, Texas, South Dakota, and Washington are the only US states that do not have a corporate income tax.
Who Pays The States?
Any company who operates or does business in a state that does mandate state corporate income taxes is required to file corporate taxes in that state. Even if for example a company is headquartered in Wyoming they would need to file California state corporate taxes if they do business in that state. If they have offices in six different states then they will need to file in all six unless of course it is included in one of the five non-corporate tax states.
Are Corporate and Personal Taxes Related?
Personal and corporate taxes are not related. If you filed your Virginia state personal income taxes on time but the corporate taxes are late then the only one that would be penalized is the corporate taxes. However, if you are a shareholder in that same company you will be taxed twice, once for your shares and again on your personal income taxes.
Having a company headquarters or office in one of the five states can decrease a company’s corporate tax liability.