Vermont Business Magazine The Tax Foundation has released its latest tax map showing the top state corporate income tax rates in 2014. Vermont and New Hampshire levy the same 8.5 percent rate, which is 12th highest, not including those states that levy a gross receipts tax. This map shows top corporate marginal tax rates in each state. Corporate income taxes vary widely, with Iowa taxing corporate income at a top rate of 12 percent (though the state allows deductibility of federal taxes paid), followed by Pennsylvania (9.99 percent), Minnesota (9.8 percent), Illinois (9.5 percent), and Alaska (9.4 percent). On the other end of the spectrum, North Dakota taxes corporate income at a top rate of 4.53 percent, followed by Colorado (4.63 percent), Georgia, Mississippi, and Utah (5 percent).
Some states do not levy a corporate income tax at all, and instead levy gross receipts taxes, which aremore harmful. Ohio levies the Commercial Activities Tax (CAT), Texas levies the Margin Tax, and Washington levies the Business and Occupation (B&O) tax. Virginia and Delaware levy both gross receipts taxes and corporate income taxes. Nevada, South Dakota, and Wyoming do not levy a corporate income tax or a gross receipts tax.
Economic studies find that corporate income taxes are among themost harmful to economic growth, while sales and property taxes are found to be less damaging to growth.