[1] In Canada, the federal tax rate is 11% for private Canadian-controlled companies with taxable income of less than CAN$500,000. In certain provinces, reduced rates are also applicable to small businesses. The 2011 general rate of 16,50% (18 % before that date) will pass to 15% as of 2012.
In the United States, the general tax rate of 35% varies depending on the corporation's taxable income. For U.S. manufacturing companies, a deduction of 9% of the profit related to production activities or taxable income is available for 2010 and thereafter, which means an actual rate reduction of 3.15%. This deduction was 3% for 2005, 2006 and 6% for 2007, 2008 and 2009.
* Certain States, such as Arkansas, California, Connecticut, District of Columbia, Georgia, Hawaii, Indiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Oregon, South Carolina, Tennessee, Texas, West Virginia and Wisconsin do not apply the federal deduction for manufacturing production. For the taxable years beginning on or after January 1, 2010, Kentucky and Virginia apply a 6% rate in regards to the deduction for manufacturing production.
City and state taxes are generally deductible from U.S. federal tax. The actual U.S. federal tax rate takes this deduction into account.
[2] Most of the rates provided for cities are from 2010, since some rates for 2011 were not available when this document was published.
[3] For tax years beginning on or after January 1, 2011, the rate on corporate taxable income is 8.25% and will be reduced to 8% for the tax years beginning on or after January 2012. Moreover, a tax on corporate capital calculated at the rate of 0.26% must be added to the 8.25% tax.
[4] Several cities in the state of Michigan levy an income tax which is generally 1%. However, the cities of Saginaw and Highland Park levy taxes of 1.5% and 2% respectively.The city of Grand Rapids levied an income tax at a rate of 1.3% before July 1st 2010. After June 30th, 2010 the rate was increased to 1.5%.
[5] Companies are subject to a tax based on the highest of four amounts. The income tax rate is 7.1%.
[6] New York City. A surtax of 17%, applied to the state tax (7.1%) for the New York metropolitan area, has been added to the city's rate of 8.85%. The three rates may not apply to all companies.
[7] City of Philadelphia. A 0.1415% tax on gross income must be calculated in addition to the income tax.
[8] The State imposes a Franchise Margin Tax at a rate of 1%. The "Margin" equals the lesser of the three following calculations: (1) Total revenues minus cost of good sold; (2) Total revenues minus compensation; and (3) 70% of total revenues. For tax years 2010 and 2011, if the revenue is less than $1,000,000, the entity is exempt to the tax liability. The threshold will be reduced to $600,000 after January 1, 2012.
Source: Investissement Québec and Raymond Chabot Grant Thornton, April 2011 |
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