Ranking Corporate Taxes on the 2018 State Business Tax Climate Index

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 tax 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 inflation, 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.

Corporate Tax Rank: 2018 State Business Tax Climate IndexThe 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.

Corporate Tax Component of the State Business Tax Climate Index (2015–2018)
  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

Related Articles