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What Is a Business Tax?

All businesses are generally required to pay some form of tax. The amount paid by each business, and the type of taxes and rates applied will depend on the particular type of business. For example, small business tax laws will be different from laws that govern large corporations. Business taxes are important for each state’s revenue, and payment of taxes helps to establish the business’s reputation and legitimacy in the community.

All business owners must be aware of their tax obligations and when these taxes are due. If a business owner does not pay the tax payments when they are due, there can be excessive fines and penalties. Failure to pay business taxes may even negatively affect the way that markets perceive the business.

What Are the Different Types of Business Taxes?

There are four basic types of business taxes. These are modeled after the structural formation of businesses. Again, the details of taxation and rates for each type of business tax will differ depending on the state or region. However, the basic types of business taxes are:

  • Income Tax:This is a business tax that is based on the yearly income of the business. The tax form and amount paid depends on the type of business being run.
  • Self-Employment Tax: This type of tax is for individuals who are self-employed. The taxes relate mostly to social security and Medicare issues. This tax is also called “SE Tax.”
  • Employment Tax: This is a tax levied on organizations that have formal employer-employee relationships.
  • Excise Tax: This is a tax that is imposed on businesses that: make or sell certain types of products; operate specific business types; use certain products, equipment, or facilities; or receive payment for specified services. There are several subcategories for excise taxes, such as environmental taxes, fuel taxes, and communications/transport taxes. 

Thus, a business may be required to pay many different taxes for a single tax year. If the company changes in any way, they will have to make necessary adjustments to their taxes.

What Are Business Tax Disputes?

Business tax disputes are tax-related legal issues that happen during a course of a business. These disputes are very serious and can affect the reputation of a business. A business owner that has issues with taxes needs to hire an attorney who understands all the changing tax laws and the tax liability that a business owner might face. Business tax disputes can be negotiated into settlements in a federal court setting. Tax disputes are different depending on the type of business that is facing the dispute and which taxes are involved.

Disputes over a business tax can happen for various reasons. For instance, it is common for there to be disputes between employers and employees over tax deductions, or there may be issues involving mistakes in a business tax return form. Disputes over business tax deductions are common, especially for small businesses. 

If you have a dispute over business taxes, you should compile any documents, tax forms, accounting sheets, and expense reports that might be related to the issue. You may need these if you plan on filing a lawsuit for your legal claim.

Do I Need a Lawyer for Help With Business Tax Issues?

Business tax issues can be complicated, even for smaller businesses and self-employed persons. You may wish to hire a qualified tax lawyer in your area if you need assistance with any business tax laws or disputes. Your attorney can help you review your claim, help you file taxes, and assist in resolving any disputes you may have. Also, your lawyer can represent you in court should it become necessary to file a lawsuit.

Photo of page author Kourosh Akhbari

, LegalMatch Legal Writer

Last Modified: 09-30-2015 01:28 PM PDT

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