The Tax Foundation released its annual report on state corporate tax rates, showing that New Jersey continues to have the highest corporate income tax rate in the United States at 11.5% for 2026.
According to the foundation’s research, 44 states levy corporate business taxes, with rates ranging from a flat 2% in North Carolina to New Jersey’s top marginal rate of 11.5%. The national median top marginal rate is 6.5%, which is significantly below New Jersey’s rate.
No state increased its corporate tax rate for 2026, but Georgia, Nebraska, North Carolina, and Pennsylvania all reduced their rates effective January 1. Georgia lowered its rate from 5.19% to 5.09%, with a further reduction planned if revenue conditions are met. Nebraska cut its flat corporate income tax from 5.2% to 4.55%, and plans another decrease in future years subject to revenue availability. North Carolina reduced its flat rate from 2.25% in 2025 to 2% in 2026 and intends to phase out the tax entirely by 2030 under current law. Pennsylvania decreased its flat corporate income tax from 7.99% in 2025 to 7.49% in 2026 and will continue annual reductions until reaching a flat rate of 4.99% by 2031.
The report notes that only four states have a corporate tax rate above nine percent: New Jersey (11.5%), Minnesota (9.8%), Illinois (9.5%), and Alaska (9.4%). New Jersey has maintained the nation’s highest corporate tax for two consecutive years after enacting a two-and-a-half percent corporate transit fee surcharge in 2024 on top of its previous nine percent rate.
On the lower end of the spectrum, thirteen states have top corporate tax rates at or below five percent for this year, including Arizona (4.9%), Arkansas (4.3%), Colorado (4.4%), Indiana (4.9%), Kentucky (5%), Mississippi (5%), Missouri (4%), North Carolina (2%), North Dakota (4.31%), Oklahoma (4%), South Carolina (5%), Nebraska (4.55%) and Utah (4.5%).
Some states—Nevada, Ohio, Texas, and Washington—impose gross receipts taxes instead of corporate income taxes, while Delaware, Oregon, and Tennessee apply both types of taxes at the state level; localities in Pennsylvania, Virginia, and West Virginia may also impose gross receipts taxes locally.
South Dakota and Wyoming are unique as they do not levy either a corporate income or gross receipts tax.
The Tax Foundation describes itself as a nonpartisan nonprofit research think tank based in Washington D.C.
The New Jersey Business & Industry Association serves as the largest statewide employer association in the nation representing employers across many sectors such as manufacturing, retailing, contracting and services throughout New Jersey (official website). The association provides advocacy efforts along with information services designed to advance business success and facilitate collaboration between businesses, government agencies and academic institutions (official website). Michele Siekerka serves as president and chief executive officer (official website).
