A tax on the income of a corporation, levied by individual states. 34 states have a progressive income tax, with tax rates rising as the income increases. State corporate income taxes are on top of federal income tax and payroll taxes. Because many states use federal corporate income tax numbers as the basis for state income tax, changes in federal corporate tax law, such as eliminating or reducing allowable deductions, will also result in increased state taxation.

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See www.taxfoundation.org

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A franchise tax is a tax imposed by a few states on the assets of the company. Some states calculate the taxable amount as the capital value of the issued shares.

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A personal income tax is levied on the income of an individual. Income tax may be levied by individual states in addition to federal income tax obligations. In addition, some cities, such as New York City, impose city personal income tax.

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The gift tax is imposed by states on the gratuitous transfer of property ownership, and is generally levied on the giver rather than on the recipient. Gift taxes are imposed by government to attempt to minimize or eliminate the transfer of assets that might prevent future imposition of estate taxes.

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A unitary tax is a state corporate income tax that is applied to all worldwide income. Unitary taxes are used to attempt to foil strategies or creative accounting techniques that might be used to transfer income tax liabilities to other states with lower tax rates.

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The estate tax is also referred to as the inheritance tax, or "death tax." The estate tax is levied by many state governments in addition to federal inheritance taxes on assets that are transferred upon the death of an individual. Thus, the estate tax is a tax on the transfer of assets that is forced by circumstances.

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Individuals who take actions or make decisions for a corporation are generally given some degree of protection, or indemnification, for personal responsibility for those actions or decisions. However, the degree of protection offered in this area by the state can vary widely. Most states provide indemnification of officers, directors and employees based on existing state case law that defines the precedent for determining the threshold where an individual can no longer be indemnified. This is problematic because existing case law is only as good as the facts of the the case - a new set of facts opens the door to a new interpretation. Generally, case law provides for a very subjective approach to determining this question. Nevada, on the other hand, provides this protection to individuals clearly in the statute, which provides a far higher bar of binding protection than any body of case law can.

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A charging order is an order by a court of proper jurisdiction which places a "charge" in the amount owed against the property or asset of a judgment debtor. While the charging order does not normally provide immediate relief to the creditor, it may safeguard the value of the asset in the future. The charging order generally prevents the creditor from foreclosing upon the ownership interest in partnership-type entities from forcing a sale of the entity's interest or assets to satisfy a judgment - a process sometimes referred to as "reverse piercing". The purpose and theory behind this limitation is to protect innocent owners from being forced to inherit potentially hostile parties as business partners as the result of a creditor foreclosure or forced sale. Such a consequence would have serious and significant negative economic implications on innocent owners. This protection has historically applied, with some variation, to limited partnerships and limited liability companies - that is, until Nevada adopted the first charging order statute to apply to the stock of closely-held corporations in 2005.

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While most states provide some element of charging order protection, it is common for state statute to allow courts to have access to additional creditor remedies in the event that the charging order is deemed insufficient. Most states that provide charging order protection also allow for the judicial foreclosure of the ownership interest as a secondary remedy. Nevada is among very few states where the statute provides that the charging order is the sole remedy of the creditor, eliminating the change of judicial foreclosure.

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The corporate veil exists as the legal separation between the assets/liabilities of the individual and the assets/liabilities of the corporation. The corporate veil may be pierced if it can be proven that the corporation is merely the "alter ego" of the individual. In most states, alter ego can be proven in a variety of ways, including failure to maintain corporate formalities or commingling of funds (however California has an impressive list of 28 different veil piercing activities). In Nevada, the corporate veil cannot be pierced unless alter ego is proven in the presence of statutory fraud or manifest injustice. This is the highest standard of corporate veil protection available.

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A Series LLC is a special form of LLC that provides separate liability protection for each internal "series", thus isolating the risks and liabilities of one series from those in another. Additionally, each series may have separate assets, liabilities, management and ownership. The efficacy of this protection has not been tested in U.S. Bankruptcy Court, and other tax issues related to the use of series LLCs remains unresolved.

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In most states, legal matters impacting businesses are heard by judges who preside over a variety of other matters and who have no particular expertise. Where a dedicated business court exists, the legal system is streamlined to accommodate the specialized needs of businesses.

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A tax on corporate shares is similar, but not identical, to a franchise tax. Where a franchise tax is a tax on the general assets of corporation, a tax on corporate shares is levied only on the value of issued shares.

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