Michael Lodge, NCPM, CRTP: If you look at the corporate state tax map below, you can see that the states in almost black covers are the worse states to have a corporation in. California I knew was going to be there, but I was surprised that Texas counted as one of the worse in business taxes. Personal income taxes in Texas are not taxed, but on the corporate side they 47th in the worse corporate taxed states.
THE TAX FOUNDATION: In the coming weeks, we will break down our 2022 State Business Tax Climate Index, with maps illustrating each of the Index's five major components: corporate taxes, individual income taxes, sales and excise taxes, property and wealth taxes, and unemployment insurance taxes.
Unlike other studies that look solely at tax burdens, the Index measures how well or poorly each state structures its tax system. It's concerned with the how, not the how much, of state revenue, since there are better and worse ways to levy taxes.
The corporate tax component of our Index measures each state’s principal tax on business activities.
Most states levy a corporate income tax on a company’s profits (receipts minus most business expenses, including compensation and the cost of goods sold), while some states levy gross receipts taxes, which allow few or no deductions for a company’s expenses and are more economically harmful than corporate income taxes.
Click here to see an interactive version of states’ corporate tax rankings, and then click on your state for more information about how its tax system compares both regionally and nationally.