Corporate income taxes vary widely across the U.S. Some states impose flat rates, while others apply graduated brackets based on taxable income, and a few have no corporate tax at all. The variation in corporate tax rate per state is significant enough that it can influence where businesses choose to operate, expand or incorporate. As of 2025, rates range from zero in states like South Dakota and Wyoming to over 11% in states such as New Jersey.
A financial advisor with tax planning expertise can help you create a plan to manage your liability.
What Is Corporate Tax?
Corporate tax is a levy imposed by federal and state governments on the profits earned by corporations. At the federal level, the corporate income tax rate is currently 21%, applied uniformly across all corporations. In addition to federal taxes, most states also assess their own corporate taxes, which can be based on net income, gross receipts or a combination of both.
State-level corporate taxes vary in structure. Some states apply a flat rate, meaning all corporate income is taxed at the same percentage. Others use a graduated system that taxes higher earnings at higher rates. A few states don’t tax corporate income at all but may impose other business-related taxes. Corporate tax revenue supports various public services, including infrastructure, education and economic development.
For corporations, the total tax burden depends not just on the statutory rate but also on deductions, credits and how taxable income is calculated under each state’s rules.
Corporate tax structures vary across the United States, with some states imposing no corporate income tax, while others implement flat or graduated rates. As of 2025, six states do not levy a corporate income tax: Nevada, Ohio, South Dakota, Texas, Washington and Wyoming. Nevada, Ohio, Texas and Washington do not have a corporate income tax but impose a gross receipts tax in its place: A gross receipts tax differs from corporate income tax in that it applies to a company’s total revenue, regardless of whether the business is profitable. In contrast, a corporate income tax is based on net income after deducting expenses. Because gross receipts taxes are levied on revenue rather than profit, businesses with thin margins may face higher effective tax rates under a gross receipts regime than they would under an income-based system. The remaining 44 states and the District of Columbia impose corporate income taxes, with rates and structures varying by state. Some states apply a flat rate to all corporate income, while others use a graduated system with multiple brackets. As of 2025, the federal corporate income tax rate in the United States is 21%. This flat rate was established under the Tax Cuts and Jobs Act of 2017, which lowered the previous top rate of 35% to make U.S. corporations more globally competitive. The 21% rate applies to all C corporations, regardless of size or industry, and is calculated based on a company’s taxable income after deductions and credits. Unlike individuals, corporations do not pay a graduated tax at the federal level. Instead, the single-rate structure simplifies compliance and forecasting for businesses. However, corporations may still face additional taxes on specific income types or international earnings, depending on how they operate. While proposals have surfaced to raise the federal rate—particularly for large multinational firms—no legislative changes have taken effect as of early-2025. The federal corporate tax remains distinct from state-level taxes, which can significantly affect a company’s total tax liability. Corporate tax obligations in the U.S. reflect a mix of federal rules and diverse state-level approaches. With policies ranging from flat-rate systems to tiered brackets—and some states foregoing corporate income taxes altogether—businesses face a wide spectrum of tax considerations depending on where they operate. These differences play a role in shaping both short-term planning and long-term growth strategies, particularly for companies comparing potential tax burdens across jurisdictions. Photo credit: ©iStock.com/Blue Planet Studio, ©iStock.com/vgajic, ©iStock.com/svetikd Read the full article hereCorporate Tax Rates and Brackets By State
States With No Corporate Tax
States With Corporate Tax
State
Tax Rate(s) and Brackets
Corporate Tax Brackets
Alabama
6.5% flat rate
All income taxable
Alaska
0%–9.4% (graduated)
0% up to $25,000; 2% to $49,000; up to 9.4% above $222,000
Arizona
4.9% flat rate
All income taxable
Arkansas
1%–5.3% (graduated)
1% up to $3,000; 2% to $6,000; up to 5.3% above $11,000
California
8.84% flat rate
All income taxable
Colorado
4.4% flat rate
All income taxable
Connecticut
7.5% flat rate
8.25% rate for Income over $100 million
Delaware
8.7% flat rate
All income taxable
Florida
5.5% flat rate
First $50,000 exempt
Georgia
5.39% flat rate
All income taxable
Hawaii
4.4%–6.4% (graduated)
4.4% up to $25,000; 5.4% to $100,000; 6.4% above $100,000
Idaho
5.695% flat rate
All income taxable
Illinois
9.5% flat rate
All income taxable
Indiana
4.9% flat rate
All income taxable
Iowa
5.5%–7.1% (graduated)
5.5% up to $100,000; 7.1% above $100,000
Kansas
3.5%–6.5% (graduated)
3.5% up to $50,000; 6.5% above $50,000
Kentucky
5% flat rate
All income taxable
Louisiana
5.5% flat rate
3.5% up to $50,000; 5.5% to $150,000; 7.5% above
Maine
3.5%–8.93% (graduated)
3.5% up to $350,000; 8.93% over $3.5 million
Maryland
8.25% flat rate
All income taxable
Massachusetts
8% flat rate
All income taxable
Michigan
6% flat rate
All income taxable
Minnesota
9.8% flat rate
All income taxable
Mississippi
4%–5% (graduated)
4% over $5,000; 5% above $10,000
Missouri
4% flat rate
All income taxable
Montana
6.75% flat rate
All income taxable
Nebraska
5%
All income taxable
Nevada
No corporate income tax
N/A/
New Hampshire
7.5% flat rate
All income taxable
New Jersey
6.5%–11.5% (graduated)
6.5% up to $100,000; 9% to $1M; 11.5% above $10 million
New Mexico
5.9%
All income taxable
New York
6.50%–7.25%
6.5% up to $5 million; 7.25% above $5 million
North Carolina
2.25% flat rate
All income taxable
North Dakota
1.41%–4.31% (graduated)
1.41% up to $25,000; up to 4.31% above $50,000
Ohio
No corporate income tax
N/A
Oklahoma
4%
All income taxable
Oregon
6.6%–7.6%
6.6% up to $1 million; 7.6% above $1million
Pennsylvania
7.99% flat rate
All income taxable
Rhode Island
7% flat rate
All income taxable
South Carolina
5% flat rate
All income taxable
South Dakota
No corporate income tax
N/A
Tennessee
6.5% flat rate
All income taxable
Texas
No corporate income tax
N/A
Utah
4.55% flat rate
All income taxable
Vermont
6%-8.5% (graduated)
6% up to $10,000; 7% to $25,000; 8.5% above $25,000
Virginia
6% flat rate
All income taxable
Washington
No corporate income tax
N/A
West Virginia
6.5% flat rate
All income taxable
Wisconsin
7.90% flat rate
All income taxable
Wyoming
No corporate income tax
N/A
District of Columbia
8.25% flat rate
All income taxable
How Much Is the Federal Corporate Tax Rate?
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