States with Highest Business Taxes and Their Impact

New Jersey tops the list with a corporate tax rate of 9.0%, making it the state with the highest business tax. This rate applies to corporations with net income exceeding $25,000.

California's high business tax rate is due in part to its 8.84% corporate tax rate, which is the second-highest in the country. This rate is applied to corporations with net income over $250,000.

Businesses in Hawaii pay an 8.25% corporate tax rate, making it the third-highest in the country. This rate applies to corporations with net income exceeding $100,000.

Oregon's high business tax rate is due to its 7.9% corporate tax rate, which is applied to corporations with net income over $1 million.

Illinois businesses pay the nation's second-highest corporate income tax rates, with a flat rate of 9.5%.

Illinois' corporate income tax rate includes a 7% business income tax rate and a 2.5% Personal Property Replacement Tax for corporations.

Only Minnesota taxes corporations at a higher rate, with a corporate income tax rate of 9.8%.

In Illinois, local taxes are included in the variable, and the effect of federal deductibility is also taken into account. A state's largest city is used as a proxy for local tax rates.

The effective tax rate for Illinois is approximated using NIPA profits, rental and proprietor’s income, and gross domestic product data. Unfortunately, I couldn't find a specific effective tax rate for Illinois in the provided article sections.

Data were drawn from Tax Analysts, Federation of Tax Administrators, individual state tax return forms, and the Bureau of Economic Analysis, just like in the example from Texas. Tax rates are as of January 1, 2024, but I couldn't find a specific date for Illinois.

Illinois businesses pay the nation's second-highest corporate income tax rates.

The state's flat corporate income tax rate is 9.5%, which includes a 7% business income tax rate and a 2.5% Personal Property Replacement Tax for corporations.

Only Minnesota taxes corporations at a higher rate, with a corporate income tax rate of 9.8%.

Illinois' corporate income tax rate is one of the main reasons why the state's tax code is among the least friendly for businesses in the entire Midwest.

Between 2021 and 2023, most states, including all of Illinois' neighboring states, reduced their personal or corporate income tax rates or both, returning an estimated $13 billion to taxpayers.

Iowa's corporate tax rate is scheduled to be reduced to a flat 5.5%, subject to revenue availability, making it an attractive option for businesses.

Illinois' stubbornly high corporate income tax rate is a major concern for businesses, especially when compared to its neighboring states.

Nevada takes the top spot as the best state for businesses, thanks to its lack of corporate or personal income taxes and a low maximum unemployment tax rate of 5.4%.

New Jersey is the worst state for businesses, with the second-highest per capita property tax in the U.S. at $3,538, and high taxes on sales, corporate, and personal income.

Businesses in the top five states – Nevada, South Dakota, Washington, Wyoming, and Texas – don't have to worry about personal or corporate taxes.

Here are the top 5 states with the lowest business taxes:

High taxes can have a significant impact on businesses, making it difficult for them to operate profitably.

The state with the highest business tax rate is New Jersey, with a rate of 9.37%. This means that businesses in New Jersey have to pay a significant amount of money in taxes, which can eat into their profits.

High taxes can lead to higher prices for consumers, as businesses may pass on the cost of taxes to their customers. This can make products and services more expensive, especially in states with high business tax rates.

New Jersey's high business tax rate is due in part to its high corporate income tax rate of 9.0%. This is the highest in the country, and it can make it difficult for businesses to operate in the state.

Businesses in states with high business tax rates may also be less likely to hire new employees, as they may not have the financial resources to do so. This can lead to higher unemployment rates and a slower economy.

The high business tax rate in New Jersey can also make it difficult for small businesses to get started, as they may not have the financial resources to pay the high taxes.