The combined state and federal corporate tax rate in Illinois now stands at 28.5 percent, representing the fifth highest levy among the 50 states and the District of Columbia, according to a new study from the Tax Foundation.
U.S. corporations pay a 21 percent income tax rate to the federal government, the Tax Foundation reported, but they also pay additional corporate taxes in 44 states and Washington, D.C. Fourteen states have imposed graduated income taxes on corporations, according to the study, while other states have a flat-rate tax.
Corporations based in six states – Ohio, Nevada, South Dakota, Texas, Washington and Wyoming – pay no state income tax, though they have to pay their share to the federal government, according to the Tax Foundation.
The businesses are allowed to deduct state income taxes from their federal tax bill, the study said. In Kentucky, for example, corporations pay a 5 percent rate, which allows them to lower their federal levy to 19.95 percent.
Combined Corporate Income Taxes, Highest to Lowest
RankStateCombined Corporate Tax Rate1Iowa29.5%2New Jersey29.3%3Pennsylvania28.9%4Minnesota28.7%5Illinois28.5%6Alaska28.4%7Maine28.1%8California28.0%9Delaware27.9%10Vermont27.7%11Maryland27.5%11Washington, D.C.27.5%13Massachusetts27.3%14Wisconsin27.2%15Nebraska27.2%16New Hampshire27.1%17Oregon27.0%18Connecticut26.9%19Kansas26.5%19Rhode Island26.5%21Idaho26.5%22Montana26.3%23Arkansas25.7%23New York26.1%23Tennessee26.1%23West Virginia26.1%27Hawaii26.1%28Louisiana26.0%29Michigan25.7%29Oklahoma25.7%29Virginia25.7%32New Mexico25.7%33Georgia25.5%34Indiana25.3%35Alabama25.1%36Kentucky25.0%36Mississippi25.0%36South Carolina25.0%39Utah24.9%40Arizona24.9%41Colorado24.7%42Florida24.6%43North Dakota24.4%44Missouri23.8%45North Carolina23.0%46Nevada21.0%46Ohio21.0%46South Dakota21.0%46Texas21.0%46Washington21.0%46Wyoming21.0%
Source: Tax Foundation