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Corporate Tax Rate by State

Corporate Tax Rate by State
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Navigating America's Corporate Tax Rates

Corporate tax policies can have sweeping implications on a state's attractiveness to businesses, influencing where corporations choose to establish their headquarters, branches, or manufacturing units. Each American state has its own corporate tax system, with the tax rate varying remarkably from state to state, presenting a complex landscape for businesses. 

  • Corporate tax rates among the 50 states vary greatly. While six states—Nevada, Ohio, South Dakota, Texas, Washington, and Wyoming—do not levy any corporate tax, states like Minnesota have a tax rate of 9.80%.
  • Most of the states with the highest corporate tax rates are concentrated in the North Eastern part of the country. Minnesota, Illinois, Pennsylvania, and Delaware are among the states with the highest corporate tax rates.
  • Southern states like North Carolina and Florida have relatively lower corporate tax rates. North Carolina has the lowest tax rate (2.50%) among states that do levy a corporate income tax. 
  • There are stark regional differences in corporate taxation methods. While four states—Nevada, Ohio, Texas, and Washington—impose a gross receipts tax instead of a corporate income tax, other states like Delaware, Pennsylvania, Virginia, and West Virginia levy both sorts of taxes.
  • Despite varying rates, corporate income tax accounts for an average of just 3.38% of state tax collections, indicating that firms often engage in tax planning to lower their effective tax rates.

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