Which corporation uses a double layer of taxation?

In the context of corporate taxation, a double layer of taxation typically refers to the taxation of corporate profits at both the corporate and individual levels. This is most commonly seen with traditional C corporations (as opposed to S corporations or LLCs, which are often taxed differently).

1. Taxation of Corporations: C corporations are subject to corporate income tax on their profits. This means that when a corporation earns a profit, it must pay taxes at the corporate rate.

2. Distribution of Dividends: When the corporation distributes these profits to its shareholders in the form of dividends, those dividends are then subject to individual income tax at the shareholder's tax rate.

As a result, the same profit is taxed twice: once at the corporate level and again at the individual level when it is distributed as dividends. This makes C corporations the primary example of entities that experience double taxation.

In summary, C corporations are the type of corporation that typically uses a double layer of taxation by being taxed on profits at both the corporate level and again at the individual level when dividends are distributed to shareholders.