Tax Glossary . . .
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Federal Income Tax
Levied by the United
States Internal Revenue Service (IRS) on the annual earnings of individuals,
corporations, trusts and other legal entities. Federal income taxes are applied
on all forms of earnings that make up a taxpayer's taxable income, such as
employment earnings or capital gains.
State Income Tax
Levied on income at the
state level. State income taxes have their own set of deductions and credits.
Local Income Tax
Assessed and levied by a
local authority such as a municipality and usually a percentage of annual
earnings.
County or Property Tax
Assessed and levied
by a county usually collected in the form of property taxes. The amount may vary
widely from one jurisdiction to the next and is often tied to a home's value.
School Tax
Laws vary by state and local
area. School districts typically collect taxes through payment of local
residents' property taxes and are usually tied to a home's value.
The Business Privilege and/or Mercantile Tax
A fixed charge
usually levied as a license fee based for the privilege of carrying on a
business in a municipality.
Occupation Tax
Usually refers to an annual
fee paid to a municipality where the taxpayer works.
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