While tax reform in 2017 lowered the federal income tax rate from 3% to 21%, most states also tax corporate income. Scott Eastman for The Tax Foundation says these state-level taxes raise the average corporate income tax rate to 25.9% in 2019.
In-state rates vary across the 44 states levying a corporate income tax. These state rates range from a low of 3% in North Carolina to a high of 12% in Iowa. Not all rates are flat; 14 states have progressively structured corporate income taxes.
The state with the highest corporate income tax rate is New Jersey, with a top combined rate of more than 30 percent. Corporations in six other states?Alaska, Illinois, Iowa, Maine, Minnesota, and Pennsylvania?face a combined rate over 28 percent.
Only six states do not assess a corporate income tax–Nevada, Ohio, South Dakota, Texas, Washington, and Wyoming. Businesses in these states still pay the 21% federal corporate rate. And in four of these states–Nevada, Ohio, Texas, and Washington–they also pay a gross receipts taxes.
Get all the reported details at The Tax Foundation.
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Judy Vorndran can be reached at jvorndran@taxops.com Or 720.227.0093. Follow Judy on LinkedIn.
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