Forty-four states in the United States impose a corporate income tax, with rates varying significantly across the country. As of January 1, 2025, North Carolina offers the lowest flat rate at 2.25 percent, while New Jersey imposes the highest top marginal rate at 11.5 percent. Recently, four states—Louisiana, Nebraska, North Carolina, and Pennsylvania—have reduced their corporate income tax rates. In contrast, New Mexico and New Jersey have increased tax burdens for corporations.

In general, among states that levy a corporate income tax, the average top rate is around 6.5 percent. Notably, Alaska, Illinois, Minnesota, and New Jersey maintain top marginal rates of 9 percent or higher.

States such as Nevada, Ohio, Texas, and Washington have opted for gross receipts taxes instead of corporate income taxes. This approach is also used by Delaware, Oregon, and Tennessee in addition to their corporate income taxes.

Two states stand out for not levying any form of corporate income or gross receipts tax: South Dakota and Wyoming.

Recent legislative changes have impacted several states:

- Louisiana has cut its corporate income tax rate to 5.5 percent through House Bill 2 and eliminated certain exemptions.

- Nebraska has moved to a flat rate of 5.2 percent as part of its broader tax reform efforts.

- New Jersey reintroduced a 2.5 percent surtax on corporations with taxable incomes exceeding $10 million.

- New Mexico adopted a flat rate system with a uniform rate of 5.9 percent on all corporate incomes.

- North Carolina reduced its flat rate to 2.25 percent as part of its long-term plan to phase out this tax by 2030.

- Pennsylvania continues its phased reduction strategy with a current flat rate of 7.99 percent.

These developments reflect ongoing shifts in state-level taxation policies aimed at balancing economic growth with fiscal needs.