The Tax Foundation released its annual comparison of state corporate tax rates on Tuesday, and the findings show that in 2026 New Jersey still saddles its businesses with the nation’s highest rate of 11.5%.
The foundation’s research shows there are 44 states that levy corporate business taxes ranging from a flat 2% rate in North Carolina to an 11.5% top marginal rate in New Jersey. The nation’s median top marginal rate is 6.5%, significantly below New Jersey’s top rate.
No states increased corporate tax rates for 2026, but four states – Georgia, Nebraska, North Carolina, and Pennsylvania—reduced their corporate income tax rates effective Jan. 1.
- Georgia reduced its corporate income tax rate from 5.19% to 5.09%. This rate will be reduced to 4.99% in the future, subject to certain revenue triggers.
- Nebraska lowered its flat corporate income tax rate from 5.2% to 4.55%. This rate will be reduced to 3.99% for tax years beginning on or after Jan. 1, 2027, subject to revenue availability.
- North Carolina reduced its flat corporate income tax rate from 2.25% in 2025 to 2% in 2026. By law, the state will phase out the corporate income tax completely by 2030.
- Pennsylvania lowered its flat corporate income tax from 7.99% in 2025 to 7.49% in 2026. The state began reducing its corporate tax rate in 2023 and has scheduled 0.5 percentage point reductions each year until 2031, when the flat rate will be 4.99%.
The research found that only four states levy a corporate tax rate over 9%: New Jersey (11.5%); Minnesota (9.8%); Illinois (9.5%); and Alaska (9.4%). New Jersey has had the top corporate tax rate for two years in a row because it enacted a 2.5% corporate transit fee surcharge in 2024 that is levied on top of its previous 9% rate.
On the opposite end of the tax spectrum, there are 13 states with top corporate tax rates at or below 5% in 2026: 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%).
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. Some localities in Pennsylvania, Virginia, and West Virginia likewise impose gross receipts taxes at the local, but not state, level.
South Dakota and Wyoming are the only states that levy neither a corporate income tax nor a gross receipts tax.
The Tax Foundation is a nonpartisan, nonprofit research think tank based in Washington, D.C.
