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Thursday, November 21, 2024

Illinois levies third highest corporate income tax rate in U.S, study finds

Corporate taxes pexels karolina grabowska

Illinois has a maximum corporate tax rate of 9.5%, just below Minnesota's rate of 9.8%. | Pexels.com / Karolina Gabrowska

Illinois has a maximum corporate tax rate of 9.5%, just below Minnesota's rate of 9.8%. | Pexels.com / Karolina Gabrowska

Illinois currently taxes corporations at a maximum rate of 9.5%, the third highest level of corporate taxation among the 50 states, according to a new analysis by the Tax Foundation.

Nationwide, among the 44 states with corporate income taxes, the rates range from a low of 2.5% in North Carolina to a high of 11.5% in New Jersey. On average, state corporate income taxes bring in only 4.04% percent of a state’s general fund revenues, according to the Tax Foundation.

Four states – Nevada, Ohio, Texas and Washington – have put in place gross receipts taxes in lieu of corporate income taxes, the study found. And South Dakota and Wyoming are the only states that have neither a corporate income tax nor a gross receipts tax, according to the Tax Foundation.

A total of 29 states have single-rate, or flat, corporate tax rates, which the analysis concluded are more reasonable than progressive, multi-rate systems, since the size of a company does not necessarily parallel the income levels of the owners.

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How Do States Structure Their Corporate Income Tax Systems?

StateFlat, Progressive or None?Top Marginal Rate
AlabamaFlat 6.50%
AlaskaProgressive9.40%
ArizonaFlat4.90%
ArkansasProgressive5.30%
CaliforniaFlat8.84%
ColoradoFlat4.55%
ConnecticutFlat7.50%
DelawareFlat8.70%
FloridaFlat5.50%
GeorgiaFlat5.75%
HawaiiProgressive6.40%
IdahoFlat5.80%
Illinois. Flat9.50%
IndianaFlat4.90%
IowaProgressive8.40%
KansasProgressive7.00%
KentuckyFlat5.00%
LouisianaProgressive7.50%
MaineProgressive8.93%
MarylandFlat8.25%
MassachusettsFlat8.00%
MichiganFlat6.00%
MinnesotaFlat9.80%
MississippiProgressive5.00%
MissouriFlat4.00%
MontanaFlat6.75%
NebraskaProgressive7.25%
NevadaNone--
New HampshireNone7.50%
New Jersey Progressive11.50%
New MexicoProgressive5.90%
New YorkProgressive7.25%
North CarolinaFlat2.50%
North DakotaProgressive4.31%
OhioNone

OklahomaFlat4.00%
OregonProgressive7.60%
PennsylvaniaFlat8.99%
Rhode IslandFlat7.00%
South CarolinaFlat5.00%
South DakotaNone--
TennesseeNone6.50%
TexasNone--
UtahFlat4.85%
VermontProgressive8.50%
VirginiaFlat6.00%
WashingtonNone--
West VirginiaFlat6.50%
WisconsinFlat7.90%
WyomingNone--
Washington, D.C.Flat8.25%
Source: Tax Foundation

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