In the coming weeks, we will break down our recently released 2018 State Business Tax Climate Index with several maps illustrating corporate, individual, sales, property, and unemployment insurance taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. rankings. Today, we look at corporate taxes.
The corporate tax component of our Index measures the impact of each state’s principal tax on business activities and accounts for 19.0 percent of each state’s total score.
Unlike other studies that look at overall tax burdens, the Index focuses on the structure of each state’s tax system. Our corporate tax component, for example, scores states not just on rates and brackets, but on how well they handle net operating losses, whether the state levies an economically harmful gross receipts-style tax, and whether a state indexes its brackets to inflationInflation is when the general price of goods and services increases across the economy, reducing the purchasing power of a currency and the value of certain assets. The same paycheck covers less goods, services, and bills. It is sometimes referred to as a “hidden tax,” as it leaves taxpayers less well-off due to higher costs and “bracket creep,” while increasing the government’s spending power. , among other things.
Click the map below to launch an interactive version of our corporate tax rankings, including a detailed landing page showing how your state compares.
The table below shows detailed corporate tax scores and rankings for each state from 2015 to 2018, as well as component rank and score changes since last year. To learn more about how we determined these rankings, read our full methodology here.
| 2015 Rank | 2015 Score | 2016 Rank | 2016 Score | 2017 Rank | 2017 Score | 2018 Rank | 2018 Score | Change from 2017 to 2018 | ||
|---|---|---|---|---|---|---|---|---|---|---|
| Rank | Score | |||||||||
| Note: A rank of 1 is best, 50 is worst. All scores are for fiscal years. DC’s score and rank do not affect other states. | ||||||||||
| Source: Tax Foundation. | ||||||||||
| Alabama | 25 | 5.15 | 23 | 5.19 | 14 | 5.53 | 22 | 5.33 | -8 | -0.20 |
| Alaska | 27 | 5.03 | 28 | 4.99 | 27 | 4.99 | 26 | 4.99 | +1 | 0.00 |
| Arizona | 23 | 5.31 | 21 | 5.37 | 19 | 5.43 | 13 | 5.55 | +6 | +0.12 |
| Arkansas | 37 | 4.69 | 39 | 4.65 | 39 | 4.60 | 39 | 4.59 | 0 | -0.01 |
| California | 32 | 4.87 | 34 | 4.83 | 33 | 4.82 | 32 | 4.82 | +1 | 0.00 |
| Colorado | 13 | 5.57 | 15 | 5.52 | 18 | 5.44 | 18 | 5.44 | 0 | 0.00 |
| Connecticut | 30 | 4.92 | 32 | 4.88 | 32 | 4.88 | 31 | 4.87 | +1 | -0.01 |
| Delaware | 50 | 3.14 | 50 | 3.08 | 50 | 2.77 | 50 | 2.77 | 0 | 0.00 |
| Florida | 14 | 5.54 | 16 | 5.49 | 19 | 5.43 | 19 | 5.42 | 0 | -0.01 |
| Georgia | 9 | 5.83 | 9 | 5.78 | 10 | 5.73 | 10 | 5.72 | 0 | -0.01 |
| Hawaii | 10 | 5.82 | 10 | 5.77 | 11 | 5.73 | 14 | 5.53 | -3 | -0.20 |
| Idaho | 22 | 5.33 | 22 | 5.28 | 24 | 5.25 | 25 | 5.25 | -1 | 0.00 |
| Illinois | 45 | 4.21 | 33 | 4.86 | 26 | 5.03 | 36 | 4.66 | -10 | -0.37 |
| Indiana | 28 | 5.03 | 24 | 5.09 | 23 | 5.27 | 23 | 5.32 | 0 | +0.05 |
| Iowa | 48 | 3.75 | 48 | 3.71 | 48 | 3.75 | 48 | 3.75 | 0 | 0.00 |
| Kansas | 36 | 4.69 | 38 | 4.65 | 38 | 4.61 | 38 | 4.61 | 0 | 0.00 |
| Kentucky | 26 | 5.06 | 27 | 5.01 | 28 | 4.95 | 27 | 4.95 | +1 | 0.00 |
| Louisiana | 21 | 5.34 | 36 | 4.78 | 40 | 4.59 | 40 | 4.59 | 0 | 0.00 |
| Maine | 43 | 4.36 | 42 | 4.33 | 41 | 4.51 | 41 | 4.51 | 0 | 0.00 |
| Maryland | 16 | 5.49 | 18 | 5.44 | 21 | 5.42 | 20 | 5.42 | +1 | 0.00 |
| Massachusetts | 35 | 4.80 | 37 | 4.75 | 36 | 4.73 | 35 | 4.73 | +1 | 0.00 |
| Michigan | 7 | 5.87 | 7 | 5.81 | 8 | 5.76 | 8 | 5.76 | 0 | 0.00 |
| Minnesota | 41 | 4.42 | 43 | 4.19 | 43 | 4.39 | 43 | 4.39 | 0 | 0.00 |
| Mississippi | 11 | 5.73 | 12 | 5.68 | 12 | 5.61 | 11 | 5.61 | +1 | 0.00 |
| Missouri | 4 | 6.05 | 3 | 6.00 | 5 | 5.96 | 5 | 5.95 | 0 | -0.01 |
| Montana | 17 | 5.48 | 19 | 5.43 | 13 | 5.59 | 12 | 5.59 | +1 | 0.00 |
| Nebraska | 29 | 4.99 | 29 | 4.95 | 29 | 4.92 | 28 | 4.92 | +1 | 0.00 |
| Nevada | 1 | 10.00 | 26 | 5.07 | 34 | 4.78 | 33 | 4.78 | +1 | 0.00 |
| New Hampshire | 47 | 3.82 | 47 | 3.79 | 47 | 3.83 | 45 | 3.99 | +2 | +0.16 |
| New Jersey | 38 | 4.54 | 40 | 4.50 | 42 | 4.49 | 42 | 4.49 | 0 | 0.00 |
| New Mexico | 34 | 4.85 | 25 | 5.09 | 25 | 5.11 | 24 | 5.25 | +1 | +0.14 |
| New York | 20 | 5.37 | 11 | 5.71 | 7 | 5.81 | 7 | 5.80 | 0 | -0.01 |
| North Carolina | 24 | 5.26 | 6 | 5.83 | 4 | 5.98 | 3 | 6.18 | +1 | +0.20 |
| North Dakota | 19 | 5.40 | 14 | 5.59 | 16 | 5.51 | 16 | 5.51 | 0 | 0.00 |
| Ohio | 44 | 4.32 | 46 | 3.98 | 46 | 3.92 | 47 | 3.92 | -1 | 0.00 |
| Oklahoma | 8 | 5.86 | 8 | 5.81 | 9 | 5.76 | 9 | 5.75 | 0 | -0.01 |
| Oregon | 33 | 4.86 | 35 | 4.81 | 35 | 4.78 | 34 | 4.78 | +1 | 0.00 |
| Pennsylvania | 42 | 4.41 | 44 | 4.18 | 44 | 4.19 | 44 | 4.18 | 0 | -0.01 |
| Rhode Island | 39 | 4.52 | 31 | 4.93 | 31 | 4.89 | 30 | 4.89 | +1 | 0.00 |
| South Carolina | 12 | 5.65 | 13 | 5.60 | 15 | 5.53 | 15 | 5.53 | 0 | 0.00 |
| South Dakota | 1 | 10.00 | 1 | 10.00 | 1 | 10.00 | 1 | 10.00 | 0 | 0.00 |
| Tennessee | 15 | 5.52 | 17 | 5.47 | 22 | 5.42 | 21 | 5.42 | +1 | 0.00 |
| Texas | 49 | 3.45 | 49 | 3.42 | 49 | 3.45 | 49 | 3.65 | 0 | +0.20 |
| Utah | 5 | 6.00 | 4 | 5.95 | 3 | 6.05 | 4 | 6.04 | -1 | -0.01 |
| Vermont | 40 | 4.51 | 41 | 4.47 | 37 | 4.65 | 37 | 4.65 | 0 | 0.00 |
| Virginia | 6 | 5.91 | 5 | 5.86 | 6 | 5.81 | 6 | 5.81 | 0 | 0.00 |
| Washington | 46 | 3.94 | 45 | 4.09 | 45 | 3.94 | 46 | 3.94 | -1 | 0.00 |
| West Virginia | 18 | 5.42 | 20 | 5.38 | 17 | 5.50 | 17 | 5.50 | 0 | 0.00 |
| Wisconsin | 31 | 4.91 | 30 | 4.94 | 30 | 4.92 | 29 | 4.92 | +1 | 0.00 |
| Wyoming | 1 | 10.00 | 1 | 10.00 | 1 | 10.00 | 1 | 10.00 | 0 | 0.00 |
| District of Columbia | 38 | 4.66 | 38 | 4.74 | 28 | 4.96 | 26 | 5.00 | +2 | +0.04 |