Four U.S. States Cut Corporate Income Taxes In 2025

According to the Tax Foundation, a nonpartisan nonprofit organization, of the 44 U.S. states that levy a corporate income tax, four reduced their rates in 2025. In Georgia, Nebraska, North Carolina, and Pennsylvania rate cuts went into effect on Jan. 1, 2026.

North Carolina, at 2.5 percent, now has the lowest corporate levy in the country while New Jersey’s top marginal rate of 11.5 percent is the highest. Three other states — Alaska, Illinois, and Minnesota — have rates that are nine percent or higher. Meanwhile, 13 states — Arizona, Arkansas, Colorado, Indiana, Kentucky, Mississippi, Missouri, North Carolina, North Dakota, Oklahoma, South Carolina, Nebraska, and Utah — have top rates at or below five percent.

Among the 44 U.S. states that impose a corporate income tax, the average top marginal rate is approximately 6.57 percent; the median top marginal rate is 6.5 percent.

In lieu of a corporate income tax, state governments in Nevada, Ohio, Texas, and Washington levy gross receipts taxes. (“Gross receipts taxes are generally considered more economically harmful than corporate income taxes,” The Tax Foundation argued.)

Delaware, Oregon, and Tennessee impose gross receipts taxes in addition to a corporate income tax while South Dakota and Wyoming are the only states that levy neither a corporate income tax nor a gross receipts tax.