Which type of business structure does not pay corporate tax?

The type of business structure that does not pay corporate tax is a sole proprietorship, partnerships, and limited partnerships. In these structures, the income is passed through to the individual owners, who then report it on their personal tax returns. As a result, the business itself is not subject to corporate income tax rates.

In contrast, a corporation is a separate legal entity from its owners and is taxed at corporate tax rates. This characteristic of corporations can lead to what's known as "double taxation," where the corporation pays taxes on its income, and then shareholders pay taxes on any dividends received. Understanding these fundamental differences in tax obligations among the various business structures is crucial for deciding the suitable form of business ownership based on the specific goals and financial situation of the business and its owners.