What is Gigantic Corporation's net tax liability if its taxable income is $325,000 and it has a general business credit of $125,000?

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The net tax liability is calculated by applying the corporate tax rate to the taxable income and then subtracting the general business credit. Assuming a corporate tax rate of 21%, the tax before credits is $68,250 ($325,000 * 21%). Subtracting the general business credit of $125,000, the net tax liability is $0, but since the credit cannot exceed the tax liability, the net tax liability is $10,813 ($68,250 - $57,437, which is the maximum credit that can be applied).

What Is Gigantic Corporation's Net Tax Liability If Its Taxable