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As of February 2025, the federal corporate tax rate in the United States stands at 21%, a rate established by the Tax Cuts and Jobs Act (TCJA) of 2017. This act reduced the previous rate from 35% to 21%, aiming to make the U.S. more competitive globally.

In addition to the federal rate, corporations may be subject to state corporate income taxes, which vary by state. These state tax rates range from 0% to approximately 12%, depending on the jurisdiction. When combined with the federal rate, the average corporate tax rate across the U.S. is about 25.7%.

It's important to note that tax policies can change with new legislation. For instance, in August 2024, then-Vice President Kamala Harris expressed support for increasing the corporate tax rate to 28%, aligning with President Biden's 2025 budget proposal. However, as of now, no such changes have been enacted, and the federal rate remains at 21%.

Additionally, in September 2024, former President Donald Trump proposed further reducing the corporate tax rate to 15% during his campaign for a second term. These proposals highlight the ongoing debate over corporate taxation in the U.S., but no legislative changes have been made to alter the current rate.

As of January 1, 2024, corporate income tax rates in the United States vary by state.

- States with No Corporate Income Tax: South Dakota and Wyoming do not levy a corporate income tax.

- States with Gross Receipts Taxes Instead of Corporate Income Taxes: Nevada, Ohio, Texas, and Washington impose gross receipts taxes on businesses rather than traditional corporate income taxes.

- States with Gross Receipts Taxes in Addition to Corporate Income Taxes: Delaware, Oregon, and Tennessee impose both gross receipts taxes and corporate income taxes.

- States with the Highest Corporate Income Tax Rates:

- Minnesota: 9.8%
- Illinois: 9.5%
- Alaska: 9.4%
- New Jersey: 9%
- Maine: 8.93%
- California: 8.84%
- Delaware: 8.7%
- Vermont: 8.5%
- Pennsylvania: 8.49%
- Maryland: 8.25%
- District of Columbia: 8.25%
- Massachusetts: 8%
- Wisconsin: 7.9%
- Oregon: 7.6%
- Connecticut: 7.5%
- Louisiana: 7.5%
- New Hampshire: 7.5%
- New York: 7.25%
- Iowa: 7.1%
- Rhode Island: 7%
- Montana: 6.75%
- Alabama: 6.5%
- Kansas: 6.5%
- Tennessee: 6.5%
- West Virginia: 6.5%
- Hawaii: 6.4%
- Michigan: 6%
- Virginia: 6%
- New Mexico: 5.9%
- Nebraska: 5.84%
- Idaho: 5.8%
- Georgia: 5.75%
- Florida: 5.5%
- Kentucky: 5%
- Mississippi: 5%
- South Carolina: 5%
- Arizona: 4.9%
- Indiana: 4.9%
- Arkansas: 4.8%
- Utah: 4.65%
- Colorado: 4.4%
- North Dakota: 4.31%
- Missouri: 4%
- Oklahoma: 4%
- North Carolina: 2.5%

Due to the complicated nature of taxation and tax laws are subject to change, it is crucial that you understand the taxation criteria and how it will impact your plan as a whole. Working with our experts can help streamline thess processes, providing valuable insights and tailored strategies to ensure successful outcome. Don’t hesitate any longer. Apply to become a client today to work with our experts on legal strategies to overcome barriers.
 

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