Business Tax by State
States ranked by total business tax burden — corporate income tax, franchise tax, LLC filing fees, and annual costs. Whether you're forming an LLC or choosing where to incorporate, the state you choose matters.
6 states
have no corporate income tax
11.5%
highest corporate rate (New Jersey)
$800/yr
California's minimum tax (even at $0 revenue)
| Rank | State | Corp Tax Rate | LLC Filing | Annual Fee | Notes |
|---|---|---|---|---|---|
| 1 | Wyoming | None | $100 | $60/yr | No corporate tax, no franchise tax, strong privacy |
| 2 | South Dakota | None | $150 | $50/yr | No corporate or personal income tax |
| 3 | Nevada | None | $75 | $350/yr | No corporate tax, higher annual fee, strong privacy |
| 4 | Texas | None | $300 | $0/yr | No corporate income tax but franchise (margin) tax 0.375-0.75% |
| 5 | Washington | None | $200 | $60/yr | No corporate income tax but B&O tax (gross receipts 0.47-1.75%) |
| 6 | Florida | 5.50% | $125 | $138/yr | 5.5% corporate rate, $50K exemption, no personal income tax |
| 7 | New Hampshire | 7.50% | $100 | $100/yr | 7.5% business profits tax + 0.55% business enterprise tax |
| 8 | Tennessee | 6.50% | $300 | $300/yr | 6.5% excise tax + 0.25% franchise tax on net worth |
| 9 | Alaska | 9.40% | $250 | $100/yr | Progressive corporate rate up to 9.4% |
| 10 | North Carolina | 2.50% | $125 | $200/yr | 2.5% flat rate — one of the lowest corporate rates |
| 11 | Colorado | 4.40% | $50 | $10/yr | 4.4% flat rate, very low filing fees ($50 LLC, $10/yr) |
| 12 | Utah | 4.65% | $54 | $20/yr | 4.65% flat rate, very low fees |
| 13 | Indiana | 4.90% | $95 | $32/yr | 4.9% flat rate, low fees |
| 14 | Arizona | 4.90% | $50 | $0/yr | 4.9% flat rate, no annual report fee |
| 15 | Michigan | 6.00% | $50 | $25/yr | 6% corporate income tax |
| 16 | Missouri | 4.00% | $50 | $0/yr | 4% corporate rate, no annual fee |
| 17 | Georgia | 5.75% | $100 | $50/yr | 5.75% flat corporate rate |
| 18 | Oklahoma | 4.00% | $100 | $25/yr | 4% corporate + small franchise tax |
| 19 | Idaho | 5.80% | $100 | $0/yr | 5.8% flat rate |
| 20 | Kentucky | 5.00% | $40 | $15/yr | 5% flat rate, very low fees ($40 LLC) |
| 21 | Delaware | 8.70% | $90 | $300/yr | Popular for incorporation (Court of Chancery) but 8.7% rate + franchise tax |
| 22 | Ohio | None | $99 | $0/yr | No corporate income tax but 0.26% commercial activity tax (gross receipts) |
| 30 | Illinois | 9.50% | $150 | $75/yr | 7% corporate + 2.5% personal property replacement tax |
| 31 | Pennsylvania | 8.99% | $125 | $0/yr | 8.99% flat rate (being reduced) |
| 32 | Massachusetts | 8.00% | $500 | $500/yr | 8% rate + $500 filing fee + $500/yr annual fee |
| 33 | New York | 7.25% | $200 | $25/yr | 7.25% business income base or capital base |
| 34 | Iowa | 8.40% | $50 | $60/yr | Flat 8.4% (recently simplified from progressive) |
| 40 | New Jersey | 11.50% | $125 | $75/yr | 9% base + 2.5% surcharge on income over $1M |
| 41 | California | 8.84% | $70 | $800/yr | 8.84% + $800/yr minimum franchise tax (even with $0 revenue) |
| 42 | Minnesota | 9.80% | $155 | $0/yr | 9.8% — one of the highest corporate rates |
Delaware vs Wyoming — The LLC Debate
Delaware
- • Court of Chancery (business-friendly courts)
- • Best for C-Corps seeking VC funding
- • $300/yr annual fee + $90 filing
- • 8.7% corporate tax rate
- • Must still register in your home state
Wyoming
- • No corporate income tax
- • No franchise tax
- • $100 filing + $60/yr — cheapest option
- • Strong privacy (no public member records)
- • Best for small LLCs and solo businesses
Important notes:
- If you incorporate in a different state than where you operate, you typically still need to register as a “foreign” entity in your home state (additional fees).
- For most small businesses/LLCs, incorporating in your home state is simplest and cheapest.
- Corporate rates shown are for C-Corporations. LLCs taxed as pass-through entities pay personal income tax rates instead.
- Data from Tax Foundation and state Secretary of State offices, 2024.