The Ohio Corporation had a 2018 taxable income of $50,000,000 from operations after all operating costs but before
(1) interest charges of $500,000,
(2) dividends received of $45,000,
(3) dividends paid of $10,000,000, and
(4) income taxes.
Using the tax schedule in Table 2.3, what is Ohio's income tax liability? What are Ohio's average and marginal tax rates on taxable income from operations?

Question

Quizplus · Accepted Answer

Ohio's taxable income is $50,000,000. Using the tax schedule, the tax liability is calculated as $17,329,725. The average tax rate is the tax liability divided by taxable income, which is 34.66%. The marginal tax rate for this income level is 35%.

The Ohio Corporation Had a 2018 Taxable Income of $50,000,000