In determining taxable income, which deduction is not applicable in State A?

In the context of taxable income determination in State A, the deduction that is not applicable is state income tax expense. This is because many states have specific regulations that limit or entirely disallow the deduction for state income taxes paid when calculating state taxable income. This approach helps states ensure that businesses contribute to state revenues by not allowing businesses to offset income with state tax liabilities that are owed to the state.

Conversely, federal depreciation deductions, operating expenses, and capital gains are generally permissible deductions when calculating taxable income for corporations. Federal depreciation is often accepted because it is a recognized expense incurred by businesses. Operating expenses are essential costs related to the day-to-day running of a business and can typically be deducted from income. Similarly, capital gains, representing profits from the sale of assets, are usually subject to taxation, but they can be accounted for differently depending on the state's tax laws.

Thus, in the context of State A, the disallowance of state income tax expense as a deduction aligns with common practices in many jurisdictions, where the focus is on ensuring that corporations do not reduce their taxable income by the very taxes they are obligated to pay to that jurisdiction.