Corporate taxes matter differently depending on your business structure. C-corporations pay federal corporate tax (21%) plus state corporate tax. S-corporations, LLCs, and partnerships are pass-through entities — profits flow to owners' personal income tax returns. This guide covers both C-corp state rates and the pass-through implications for small business owners in all 50 states in 2026.
These states have no traditional corporate income tax (though some have alternative taxes):
| State | State Corporate Rate | Combined (+ 21% Federal) |
|---|---|---|
| New Jersey | 11.5% (above $1M) | ~32.5% |
| Pennsylvania | 8.99% | ~29.99% |
| Minnesota | 9.8% | ~30.8% |
| Iowa | 8.4% | ~29.4% |
| Alaska | 9.4% (top bracket) | ~30.4% |
| Massachusetts | 8% | ~29% |
| Illinois | 9.5% (inc. personal property replacement tax) | ~30.5% |
| New Hampshire | 7.5% (Business Profits Tax) | ~28.5% |
| California | 8.84% | ~29.84% |
| New York | 6.5–7.25% | ~27.5–28.25% |
| Wisconsin | 7.9% | ~28.9% |
| Montana | 6.75% | ~27.75% |
| Rhode Island | 7% | ~28% |
| Maryland | 8.25% | ~29.25% |
| Louisiana | 7.5% | ~28.5% |
| Florida | 5.5% | ~26.5% |
| Georgia | 5.75% | ~26.75% |
| Colorado | 4.4% | ~25.4% |
| Arizona | 4.9% | ~25.9% |
| Utah | 4.65% | ~25.65% |
| North Carolina | 2.5% | ~23.5% |
| Oklahoma | 4% | ~25% |
| Wyoming | 0% | 21% |
| Nevada | 0% | 21% |
| South Dakota | 0% | 21% |
| Ohio | 0% (CAT gross receipts) | ~21% |
| Texas | 0% (margin tax) | ~21% |
Most small businesses are structured as LLCs, S-corps, or partnerships — not C-corps. Pass-through taxation means corporate-level tax doesn't apply; income flows to owners' personal returns. Key state considerations:
Many states now allow pass-through businesses to elect to pay state income tax at the entity level — creating a federal deduction for the state tax (bypassing the $10,000 SALT cap on personal returns). Available in: California, New York, New Jersey, Maryland, Georgia, and 30+ other states.
S-corp elections allow business owners to split income between salary (subject to 15.3% self-employment/FICA tax) and distributions (not subject to SE tax). In high-revenue businesses, S-corp election can save $5,000–$30,000+/year in SE tax — at the cost of more complex payroll administration.
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Business entity selection (LLC, S-corp, C-corp), state incorporation strategy, S-corp salary vs distribution splits, and multi-state tax nexus all require specialist guidance. Get matched with a business CPA who understands your situation.
⚠ Not for simple single-state returns. Free filing is fine for straightforward W-2 situations.
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