New Jersey and New Mexico are the only two states to increase corporate tax rates in 2025, according to data from the Tax Foundation, a nonpartisan research organization. Meanwhile, Louisiana, Nebraska, North Carolina, and Pennsylvania have reduced their corporate tax rates as of January 1.
The Tax Foundation reports that 44 states impose corporate income taxes ranging from North Carolina's 2.25% flat rate to New Jersey's top marginal rate of 11.5%. The four states reducing rates include Louisiana at 5.5%, Nebraska at 5.2%, North Carolina at 2.25%, and Pennsylvania at 7.99%.
In contrast, New Mexico has raised its graduated corporate tax rate to 5.9%, while New Jersey added a 2.5% surtax to its existing Corporation Business Tax (CBT), raising it to the highest national rate of 11.5%.
Among states with corporate income taxes, both the average and median top rates stand at 6.5%. States with top marginal rates exceeding 9% include Minnesota (9.8%), Illinois (9.5%), Alaska (9.4%), with Maine and California close behind at approximately 8.93% and 8.84%, respectively.
Twelve states maintain top rates at or below 5%, including Arizona, Arkansas, Colorado, Indiana, Kentucky, Mississippi, Missouri, North Carolina, North Dakota, Oklahoma, South Carolina, and Utah.
Instead of corporate income taxes, Nevada, Ohio, Texas, and Washington apply gross receipts taxes; Delaware, Oregon, and Tennessee use both systems; South Dakota and Wyoming levy neither type.
Further details are available in the full analysis by Abir Mandal of the Tax Foundation.
