New Jersey continues to have the highest corporate tax rate in the United States, according to the Tax Foundation’s annual comparison of state corporate tax rates released on Tuesday. The report states that New Jersey businesses face a top marginal rate of 11.5% in 2026.
The Tax Foundation’s research shows that 44 states impose corporate business taxes, with rates ranging from North Carolina’s flat 2% to New Jersey’s 11.5%. The median top marginal rate nationwide is 6.5%, which is considerably lower than New Jersey’s rate.
No state increased its corporate tax rate for 2026. However, Georgia, Nebraska, North Carolina, and Pennsylvania reduced their corporate income tax rates effective January 1:
– Georgia lowered its corporate income tax from 5.19% to 5.09%, with plans to further reduce it to 4.99% pending certain revenue conditions.
– Nebraska dropped its flat corporate income tax from 5.2% to 4.55%. This will be further reduced to 3.99% for tax years beginning on or after January 1, 2027, subject to available revenue.
– North Carolina decreased its flat corporate income tax from 2.25% in 2025 to 2% in 2026 and is set by law to phase out the corporate income tax entirely by 2030.
– Pennsylvania cut its flat corporate income tax from 7.99% in 2025 to 7.49% in 2026 and plans continued reductions until reaching a flat rate of 4.99% by 2031.
The study found that only four states have a corporate tax rate above nine percent: New Jersey (11.5%), Minnesota (9.8%), Illinois (9.5%), and Alaska (9.4%). New Jersey has held the top spot for two consecutive years following the enactment of a two-and-a-half percent corporate transit fee surcharge in 2024, added on top of its previous nine percent rate.
On the other end of the spectrum, thirteen states have top corporate tax rates at or below five percent 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%).
Some states use gross receipts taxes instead of traditional corporate income taxes; Nevada, Ohio, Texas, and Washington fall into this category, while Delaware, Oregon, and Tennessee apply both types of taxes at the state level.
South Dakota and Wyoming are unique as they do not levy either a corporate income tax or a gross receipts tax.
The Tax Foundation describes itself as a nonpartisan nonprofit research think tank based in Washington D.C.
The New Jersey Business & Industry Association serves as the nation’s largest statewide employer association representing private-sector employers across industries such as manufacturing, retail, wholesale, contracting and services throughout New Jersey (source). The organization advances competitive excellence and financial success for its members while facilitating partnerships among businesses, government entities and academic institutions (source).
