New Jersey and New Mexico are the only two states that raised corporate tax burdens for 2025, while four states cut corporate tax rates, according to data released Tuesday by the Tax Foundation, an independent nonpartisan research organization.
A total of 44 states levy corporate income taxes that range from the 2.25% flat rate in North Carolia to the 11.5% top marginal rate in New Jersey, the foundation said.
The four states that reduced their corporate rates on Jan. 1 were Louisiana (now 5.5%), Nebraska (now 5.2%), North Carolina (now 2.25%) and Pennsylvania (now 7.99%).
New Jersey and New Mexico are the only two states to increase tax burdens for corporations. New Mexico increased its graduated corporate tax rate to 5.9% in 2025 and New Jersey has added a 2.5% surtax to its top 9% Corporation Business Tax (CBT) that raised the top marginal CBT rate to 11.5% – the highest corporate tax rate in the nation by far.
Among states that impose a corporate income tax, the average top rate is 6.5% and the median rate is also 6.5%.
There are four states with a top marginal corporate tax rate above 9%: New Jersey (11.5%), Minnesota (9.8%), Illinois (9.5%) and Alaska (9.4%). Maine and California are not far behind with their rates of 8.93% and 8.84%, respectively.
Twelve states—Arizona, Arkansas, Colorado, Indiana, Kentucky, Mississippi, Missouri, North Carolina, North Dakota, Oklahoma, South Carolina, and Utah— have top rates at or below 5%.
Nevada, Ohio, Texas, and Washington impose gross receipts taxes instead of corporate income taxes. Delaware, Oregon, and Tennessee impose gross receipts taxes in addition to their corporate income taxes. South Dakota and Wyoming are the only states that levy neither a corporate income nor gross receipts tax.
The full analysis by the Tax Foundation’s Abir Mandal can be found here.
