State Income Tax for Businesses
Most states tax business income in some form. The type of tax and rate depend on your business structure and the state.
No State Income Tax (9 States)
Alaska, Florida, Nevada, New Hampshire*, South Dakota, Tennessee*, Texas, Washington, Wyoming
*New Hampshire and Tennessee tax investment income only, not earned income.
How Business Income Is Taxed
- •Sole proprietorships & single-member LLCs: Income flows to your personal return and is taxed at your individual state income tax rate
- •Partnerships & multi-member LLCs: Income flows to each partner's personal return
- •S-Corps: Income flows to shareholders' personal returns (some states also have an entity-level tax)
- •C-Corps: Taxed at the state corporate income tax rate (ranges from 2.5% to 11.5%)
Special State Taxes to Watch
- •California $800 franchise tax: All LLCs owe $800/year regardless of income
- •Texas franchise (margin) tax: Applies to businesses with revenue over ~$2.47M
- •Washington B&O tax: Gross receipts tax (no deductions for expenses)
- •Ohio CAT: Commercial Activity Tax on gross receipts over $150K
State Tax Guides
Select your state for specific business tax rates, filing requirements, and deadlines.
AlabamaAlaskaArizonaArkansasCaliforniaColoradoConnecticutDelawareDistrict of ColumbiaFloridaGeorgiaHawaiiIdahoIllinoisIndianaIowaKansasKentuckyLouisianaMaineMarylandMassachusettsMichiganMinnesotaMississippiMissouriMontanaNebraskaNevadaNew HampshireNew JerseyNew MexicoNew YorkNorth CarolinaNorth DakotaOhioOklahomaOregonPennsylvaniaRhode IslandSouth CarolinaSouth DakotaTennesseeTexasUtahVermontVirginiaWashingtonWest VirginiaWisconsinWyoming
Related Resources on This Site
Helpful guides
- FormationLLC vs S-Corp — which is right for you?
- Sales Taxsales tax rates & rules by state
- Estimated Taxesquarterly estimated taxes — when and how to pay
- Deductionsbusiness tax deductions checklist
This is general information, not tax advice.