Corporate Taxes By State [Latest Statistics of 2025]

Are you trying to navigate the world of corporate taxes by state? Maybe you're beginning a new business or considering moving your existing company across state lines.

Whatever your reason, knowing how each state handles corporate taxes can be vital information, affecting your bottom line in surprising ways.

It's time we demystify the subject of state-level corporate taxation. Prepare for an enlightening explanation that will equip you with the necessary knowledge without overwhelming you with technical jargon.

Let's get started and discover how your business might be impacted by corporate taxes in different states.

What Is Corporate Tax?

Corporate tax is a direct tax imposed by a government on the income or capital of corporations or analogous legal entities.

It's calculated based on the value of a company's profit. This means businesses, whether small, large, public, or private, must pay a portion of their earnings as tax to the government.

The corporate tax rate differs from country to country and, sometimes, regionally within countries.

The government uses the revenue collected from these taxes for various public services and economic growth and development initiatives.

Corporate Taxes By State

State	Corporate Tax Rate
New Jersey	11.5%
Minnesota	9.8%
Illinois	9.5%
Alaska	9.4%
Pennsylvania	9%
Maine	8.9%
California	8.8%
Delaware	8.7%
Vermont	8.5%
Iowa	8.4%
District of Columbia	8.3%
Maryland	8.3%
Massachusetts	8%
Wisconsin	7.9%
Oregon	7.6%
Connecticut	7.5%
Louisiana	7.5%
New Hampshire	7.5%
Nebraska	7.3%
New York	7.3%
Kansas	7%
Rhode Island	7%
Montana	6.8%
Alabama	6.5%
Tennessee	6.5%
West Virginia	6.5%
Hawaii	6.4%
Michigan	6%
Virginia	6%
New Mexico	5.9%
Georgia	5.8%
Idaho	5.8%
Florida	5.5%
Arkansas	5.3%
Kentucky	5%
Mississippi	5%
South Carolina	5%
Arizona	4.9%
Indiana	4.9%
Utah	4.9%
Colorado	4.6%
North Dakota	4.3%
Missouri	4%
Oklahoma	4%
North Carolina	2.5%
Nevada	0%
Ohio	0%
South Dakota	0%
Texas	0%
Washington	0%
Wyoming	0%

10 States with the Highest Corporate Taxes

Navigating corporate taxes can be challenging, especially considering the significant variations between different states.

With rates that can greatly impact your business operations, understanding the specificities of each state's corporate tax structure is crucial.

Here, we'll review three states with some of the highest corporate tax rates in America - New Jersey, Minnesota, and Illinois.

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1. New Jersey

It's impossible to ignore New Jersey when talking about high corporate taxes. This state tops the list with a staggering corporate tax rate of 11.50%.

The Garden State also places a substantial capital gains tax of 10.75%. Its property tax similarly trends higher than most other states, standing at 2.13%.

From these figures alone, it's clear that businesses operating in New Jersey bear a considerable fiscal burden - reflected in its total state and local tax burden of 13.20% of personal income.

Aside from its high-tax regime, businesses in New Jersey also need to consider their net operating losses (NOLs), which they can only carry forward for 20 years with no opportunity to carry back.

Despite these drawbacks, it's worth mentioning that New Jersey does hold incentives like recurring business grants stimulating business growth and job creation.

2. Minnesota

Minnesota follows closely behind with one of the highest corporate rates in the country - an impressive 9.80%.

It's not just corporate taxes where Minnesota shows its teeth; capital gains are also subject to a formidable rate of 9.85%.

While its property tax rate is relatively moderate at 1.05%, don't let this distract you from the fact that Minnesota maintains a considerable combined state and local tax burden - weighing in at an above-average rate of 12.10%.

Being aware of Minnesota’s Alternate Minimum Tax (AMT) is essential for corporations doing business here—it applies to all corporations with federal taxable income allocated or apportioned to Minnesota.

3. Illinois

In third place, we have Illinois, another fierce contender for noticeable corporate taxation, with a hefty rate of 9.50%.

Illinois’s capital gains tax is lower than other high-tax states at 4.95%, offering somewhat of a hiatus for businesses generating income through appreciating assets—a slight silver lining compared to IRS restrictions.

Despite this potential relief point, property taxes are still significantly higher than many others nationwide, standing at an intimidating 1.97%.

Therefore, companies that own larger real estate properties will have to grapple with this extra financial obligation, culminating in an onerous combined state and local tax burden of around 12%.

4. Alaska

Alaska is unique, not just for its breathtaking landscapes but for its corporate taxation structure.

The Last Frontier imposes a notable corporate tax rate of 9.40%, placing it amongst the states with higher corporate taxes.

Intriguingly, it is offset by no capital gains tax, making it a suitable ground for businesses relying heavily on the sale of assets.

Property taxes in Alaska are relatively moderate, standing at 0.98%. Additionally, Alaska stands out due to its low combined state and local tax burden - only 4.60% of personal income.

This lower burden can potentially outweigh the high corporate tax when considering relocating or setting up a business here.

It is worth noting that Alaska is one of the six states with gross receipts-based systems instead of traditional margins-based corporate income tax; hence, profits aren't the only base for taxes here.

5. Pennsylvania

Pennsylvania presents another distinct panorama in state-level corporate taxation with a significant 9% corporate tax rate, reinforcing its high taxation reputation with its capital gains taxed at 3.07%.

Notable, too, is Pennsylvania's significant property tax rate levied at 1.42%, indicating a considerable financial obligation for larger property holders.

Balanced against these high rates is Pennsylvania's state-local tax burden, amounting to around 10.6%.

Thus, while other considerations like business incentives might entice businesses to Pennsylvania, the overall fiscal pressure tends to be heavier.

Also noteworthy is Pennsylvania’s Capital Stock Tax or Foreign Franchise Tax, applicable to corporations with capital or property in the state or doing business within its territory.

6. Maine

Maine, fondly known as "Vacationland," has an impressive 8.90% corporate tax rate, demonstrating fairly high tax expectations from businesses domiciled in the state. Maine's capital gains tax is 7.15%, adding further fiscal responsibilities based on successful asset appreciation.

When discussing property ownership, Maine charges a nominal rate of 1.20% - drawing extra funds from businesses with significant real estate holdings.

This results in Maine having one of the highest combined state and local burdens across America - measuring up to around 12.40%.

Businesses looking toward Maine must also understand additional obligations like their Franchise Tax based on corporations' taxable net worth.

7. California

The Golden State, renowned for its Silicon Valley and huge conglomerates like Apple, Facebook, and Google, has a corporate tax rate of 8.80%—notably higher than many of its counterparts.

Further amplifying this fiscal pressure is California’s rather staggering capital gains tax rate of 13.30%— the highest in the country.

Companies operating in California need to be vigilant about these rates due to their significant impact on fiscal planning and overall profit margins.

On the other hand, it's worth noting that California's property tax rate is relatively low compared to other states, at only 0.70%.

Don’t let this point distract you from the fact that California has one of the heaviest total state-local tax burdens in America at 13.50%.

This all-encompassing figure includes additional taxes such as individual income tax and sales taxes, which can indirectly affect businesses as fewer customers have disposable income to spend.

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8. Delaware

Contrary to its small size, Delaware holds quite a punch in corporate taxation, with an impressive rate of 8.70%.

Capital gains don't bear as much weight here compared with its counterparts having a rate of only 6.60%.

Despite this fixed corporate taxation context, though, Delaware still attracts many corporations. Over one million businesses are incorporated here, including more than half of all publicly traded companies in the U.S., thanks largely to favorable laws for business owners.

The state stands out with one of the lightest property tax burdens nationwide at a modest 0.59%, while the overall state-local tax stands at a relatively balanced mid-range figure—12.40%.

9: Vermont

While known for maple syrup and snowy landscapes, Vermont presents substantial corporate taxation, reaching up to rates equivalent to 8.50%.

The state applies an elevated pressure regarding capital gains taxed at an appreciable rate of 8.75%.

Vermont’s property taxes aren’t any easy either—they stand as one of the steepest in America at levels around 1.76%, making it particularly costly for real estate companies.

These charges considered, it comes as no surprise that Vermont’s total state-local tax burden leans towards the higher end, clocking in at a considerable figure equaling approximately 13:60% of average local incomes.

10. Iowa

If you're operating your business in Iowa, you'll be dealing with a top corporate tax rate of 8.40% on your company's earnings.

This rate is graduated, meaning it varies according to income levels, starting at 5% for net incomes up to $25,000 and topping out at 8.40% for net income over $250,000. Alongside this corporate tax rate, you'll also face a capital gains tax of 8.53%.

This rate applies to the sale of assets and is vital to consider in your financial planning as an entrepreneur or business owner.

Regarding property taxes, businesses in the Hawkeye State encounter a considerably high rate of 1.43%. However, remember that property tax relief measures could lessen this burden.

One unignorable fact businesses will grapple with in Iowa is the state-local tax burden at 11.20%; this falls just above the national average.

Poring over these statistics may feel proletarian-like - but understanding Iowa’s taxation climate can benefit your bottom line.

11 States with the Lowest Corporate Taxes

Running a business is no small feat, particularly when managing various tax obligations. Fortunately, various US states offer lower corporate tax rates that may be the breath of fresh air your company needs. Here are details of three tax-friendly states- Utah, Colorado, and North Dakota.

1. Utah

Long hailed as a business-friendly state, Utah boasts one of the country's lowest corporate tax rates at 4.90%. This is coupled with a modest capital gains rate of 4.95%.

Property owners may find solace in the state’s low property tax rate of 0.56%, which reduces expenses for businesses that own real estate assets here.

Despite these low rates, Utah maintains an average state-local tax burden—almost on par with many high-tax states—at around 12.10%.

Businesses need to remember that Utah assesses its corporate taxes based on a corporation’s Utah net income and applies a single flat rate instead of multiple brackets. Thus creating predictability, which can aid forecasting and budget planning.

2. Colorado

Colorado also offers attractive prospects regarding corporate taxation by maintaining a low corporate tax rate of 4.60%. Similarly low is the capital gains charge at just 4.55%, easing pressure on corporations with substantial investments.

Regarding property taxes in Colorado, businesses again stand to benefit from another relatively low rate at 0.52%.

As a result of these low charges across three significant areas (corporate tax, capital gains tax, and property tax), the overall state-local obligation boils down to a palatable 9.70%.

It's worth noting that Colorado operates on a flat income tax system depending on your federal taxable income; hence, uniformity might take away certain opportunities for more prominent companies to explore deductions or credits.

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3. North Dakota

In North Dakota – where ‘legendary’ isn't just for their tourism campaign but also their leniency toward corporates regarding taxes—the corporate revenue-generating rate stands at only 4.30%—one of the lowest in the nation.

The capital gains charge in this state presents another refreshing divergence from high-tax regions by locking themselves at just under 3% (2.90%). Property owners won’t have much to complain about either since real estate charges are also preserved at an acceptable level (0.88%).

As anticipated from such low-key figures compared with others across America—the combined state-local burden finally rests at an invitingly bearable amount—pegging itself proudly as pretty-low-pressure territory—at barely more than national average levels (8.80%).

North Dakota’s favorable business climate extends beyond attractive taxation, too—with resources like The Innovate ND Program, which assists entrepreneurs in innovating and succeeding through business consultation and funding.

4. Missouri

Missouri sports a significantly lower corporate tax rate than the national average, making it appealing for businesses at both 4%.

Companies must understand this state's unique taxation landscape despite this reduced rate. Capital gains are levied at a moderate rate of 5.40%, situating Missouri on the more pleasant side of capital gains taxation compared to many other states.

In line with these rates is Missouri’s property tax at 0.96%. While not the lowest in the country, it's still substantially lower than in many other states.

A distinguishing characteristic of Missouri’s taxation rules is its single-factor apportionment system—meaning corporations are taxed based on their sales within the state alone.

And despite its lower corporate and property taxes, the total state and local tax burden is slightly above average 9.30% - no small figure for any business to consider.

5. North Carolina

Shifting over to North Carolina, we witness an even lower corporate tax scenario. The Tarheel State boasts one of the most competitive corporate tax rates across the United States at only 2.50%.

Combined with a below-average capital gains tax rate of just under 5% (4.99%, to be exact), North Carolina is an attractive location for incorporations.

Keeping with its trend of below-average taxation rates is North Carolina's property tax—just 0.78%! This valuables-friendly environment persists across different aspects of North Carolina’s fiscal structure.

When determining a location for your business operations, look beyond these enticing numbers towards the total state-local tax burden—it stands just under double digits at 9.9%.

6. Nevada

If you're searching for a low-tax haven within mainland America—you'll probably find yourself drawn towards Nevada! It's hard to beat a corporate and capital gains tax rate of precisely 0%.

This zero-rate policy extends to private income, franchise, and estate taxes–making it an excellent home base for people looking to maximize savings from earnings and growth.

But don't get blindsided by all these zeroes– Nevada still applies property taxes at an average rate of about 0.56% - moderate but noteworthy nonetheless.

It might seem like there isn't much left after such an extensive zero-taxation proclamation—but remember this: Nevada corporations aren't completely off the hook regarding financial obligations towards public resources because the total state-local tax burden is about average — standing around 9.60%.

7. Ohio

Welcome to Ohio, where the corporate tax rate is a remarkable 0%. You heard it right: businesses in the Buckeye State aren't subjected to a state-level corporate tax, providing a substantial saving opportunity for corporations based here.

While the state corporate tax is non-existent, companies are still liable for federal corporate taxes.

However, it's crucial not to overlook the capital gains tax rate of 4.80%. This rate applies to any fruition from selling assets such as property or stocks above their original purchase cost. Consider this factor if your business model includes making such transactions.

Regarding property taxes, at 1.52%, they're on the higher side compared to many states across America.

As with every benefit or disadvantage on this list, its impact will significantly depend upon whether you rent or own your business premises.

Despite its significant tax advantages, Ohio's total state and local tax burden stands at 10% of income: still lower than some high-tax states but necessary to consider when analyzing overall fiscal responsibility.

8. South Dakota

Surprisingly, many corporations aren't aware that South Dakota enjoys an exceptional standing amongst all US states with a corporate tax rate of 0% – indeed, an attractive proposition for businesses setting up shop here.

There's no personal income or personal property tax on corporations either—more reasons to rejoice.

The icing on the cake? South Dakota doesn't levy capital gains either—it stands at an appealing 0%. Well-earned earnings from the sale of your capital assets go straight into your pockets without being shared with the state - quite compelling!

Be mindful of property taxes: hovering around a moderate 1.14%, you'd need to plan for this if your business strategy includes owning substantial real estate properties in South Dakota.

All these elements give us a total state and local tax burden of a meager 8.40% - quite reasonable compared to several other states and especially attractive given South Dakota's otherwise highly accommodating fiscal environment for businesses.

9. Texas

When considering their corporate taxes, things might seem similar in Texas (spoiler alert: it's also 0%).

Texas eliminates one more worry from your taxation list, offering corporations some fiscal breathing space and attractive incentives for entrepreneurs or existing businesses looking to relocate.

Capital gains follow suit with no levy insisted by Lone Star State—your returns from investments remain untouched by additional taxation—a surefire cause for celebration!

Texas compensates with higher property taxes – around 1.60% - one of the highest in America, which could require careful financial planning if you own property in Texas associated with your business operations.

Although their total sum of individual and overall corporate consumption taxes might feel intimidating at first glance (it balances out around 8.60%), when factored against other states boasting progressively higher rates on multiple fronts, Texas remains an appealing prospect!

10. Washington

At first glance, Washington's 0% corporate tax rate looks quite appealing and may seem like the state is offering a corporate tax haven.

But this doesn't mean businesses are completely off the hook regarding taxation. While no specific corporate or personal income tax is levied, businesses are subject to a Business and Occupation (B&O) tax based on their gross receipts — meaning every cent you make is potentially taxable.

The capital gains tax rate in Washington stands at 7%. This applies to profits from the sale of investments and property, but it doesn't apply universally.

Instead, only those who make significant income from selling capital assets will typically face these taxes.

Washington has a relatively moderate property tax rate at 0.84%, with the average homeowner paying around $3,601 annually in property taxes.

And let's not forget the combined state-local tax burden, which sits around 10.70%, making it one of the highest in the country.

11. Wyoming

Jumping to Wyoming, you'll find another state with an enticing offer for businesses with a 0% corporate tax rate – speaking volumes about why so many Fortune 500 companies have registered subsidiaries there.

As sweet as this deal sounds, you may wonder how such a state manages its revenue collection without collecting corporate income taxes.

The answer lies in sales and use taxes that range between 4-6% depending on county-level additions.

Further contributing to Wyoming's appeal for business owners is that it also maintains a zero capital gains tax – meaning that companies and individuals do not pay any additional charges on profits from the sale of assets.

Property taxes in Wyoming stand reasonably low at just 0.51%, below half of what most states demand.

Despite not having traditional income or corporate taxes, Wyoming still maintains a state-local tax burden of approximately 7.50%, indicating that other forms of taxes offset this absence.

Federal vs State Corporate Taxes

The national government imposes federal corporate taxes based on a corporation's taxable income. As of 2021, the U.S. federal corporate tax rate is 21%.

On the other hand, state corporate taxes are levied by individual states, and rates can vary significantly from state to state. For instance, some states like Nevada, South Dakota, and Wyoming do not levy any corporate tax, while others may charge a rate up to 12%.

Companies operating in multiple states may have to pay federal and state corporate taxes. Corporations must stay updated with their respective state laws and federal regulations to fulfill their tax obligations accurately.

FAQs About corporate Taxes by state

Conclusion

The state your business is incorporated in can significantly impact your overall tax burden. It's crucial to meticulously explore your options and understand how each state's unique tax climate will affect your company's bottom line.

With multiple factors in play, like corporate income tax rate, property taxes, capital gains taxes, and more, balance is key.

While corporate taxes are just a part of doing business, being educated on these matters can help you make more strategic decisions about where to start or expand your operations and possibly save you money in the long run.