US Low Corporate Tax States 12-5-25

In 2025, six states have no corporate income tax: Nevada, Ohio, South Dakota, Texas, Washington, and Wyoming. South Dakota and Wyoming are the only states that have neither a corporate income tax nor a gross receipts tax.  

States with No Corporate Income Tax 

The following six states do not impose a corporate income tax on business profits: 

Nevada: Imposes a Commerce Tax on gross revenue.

Ohio: Levies a Commercial Activity Tax (CAT), which is a gross receipts tax.

South Dakota: Has no corporate or individual income taxes and no gross receipts tax, making its business tax climate highly competitive.

Texas: Imposes a franchise tax (based on margin/gross receipts) on entities with revenues above a certain threshold.

Washington: Assesses a Business & Occupation (B&O) Tax, which is a gross receipts tax.

Wyoming: Levies neither a corporate income nor gross receipts tax, often ranking as the most business-friendly state for taxes. 

States with the Lowest Corporate Tax Rates

For states that do impose a corporate income tax, the rates vary. North Carolina has the lowest flat rate in the country at 2.25%. Other states with low top marginal rates (at or below 5%) include: 

North Carolina: 2.25% flat rate

Oklahoma: 4% flat rate

Missouri: 4% flat rate

North Dakota: 1.41%–4.31% (graduated)

Colorado: 4.4% flat rate

Utah: 4.55% flat rate

Arizona: 4.9% flat rate

Indiana: 4.9% flat rate

Kentucky: 5% flat rate

Mississippi: 4%–5% (graduated)

South Carolina: 5% flat rate 

For a detailed breakdown of tax structures by state, refer to the Tax Foundation. 

As of 2025, South Dakota and Wyoming are the only states with no corporate income tax or gross receipts tax. Six states total have no corporate income tax but some impose an alternative gross receipts tax. 

States with No Corporate Income Tax (2025) 

Six states do not levy a corporate income tax on C corporations. However, four of these states impose a gross receipts tax instead, which is a tax on a company's total revenue, regardless of profit. 

Nevada: Imposes a Commerce Tax on gross revenue for businesses above a certain threshold.

Ohio: Levies the Commercial Activity Tax (CAT).

South Dakota: Levies neither a corporate income tax nor a gross receipts tax. It consistently ranks as one of the best states for business taxes overall.

Texas: Imposes the Franchise Tax, calculated on margin (gross receipts minus certain deductions) for entities with sufficient revenue.

Washington: Assesses the Business & Occupation (B&O) Tax.

Wyoming: Levies neither a corporate income tax nor a gross receipts tax. It is widely considered the best state for business taxes due to its lack of both individual and corporate income taxes. 

States with the Lowest Flat Corporate Income Tax Rates 

For states that do impose a traditional corporate income tax, the lowest rates for 2025 are flat rates (applied to all taxable income) or have very low top marginal rates. 

North Carolina: Has the lowest flat corporate income tax rate in the country at 2.25%. This rate is part of a plan for full repeal by 2030.

Colorado: Imposes a flat rate of 4.4%.

Oklahoma: Has a flat rate of 4%.

Missouri: Has a flat rate of 4%.

Arizona: Has a flat rate of 4.9%.

Indiana: Has a flat rate of 4.9%.

South Carolina: Has a flat rate of 5%.

Kentucky: Has a flat rate of 5%. 

Many businesses, especially LLCs and S corporations, are taxed as pass-through entities, meaning the business's income is reported on the owners' personal tax returns, which are subject to individual income tax rates rather than corporate rates. 

https://www.google.com/search?q=what+states+have+the+lowest+corporate+tax+rates+2025

Norb Leahy, Dunwoody GA Tea Party Leader