Corporate Tax

Minnesota firms would pay a mixed corporate tax charge of 35.1% underneath the Biden Plan Information

The combined state and state corporate income tax rate in Minnesota would reach 35.1 percent, according to President Joe Biden’s infrastructure plan, a tie for the third highest tax among the 50 states, according to a new study by the Tax Foundation.

U.S. companies currently pay a corporate tax rate of 21 percent to the federal government, the Tax Foundation reported, but they also pay additional corporate taxes in 44 states and Washington, DC. Corporate tax rates range from zero to 11.5 percent, and the combined average of amounts paid by companies is 25.8 percent, according to the study.

Corporations based in six states – Ohio, Nevada, South Dakota, Texas, Washington, and Wyoming – don’t pay state income tax, though they must pay their stake to the federal government, according to the Tax Foundation.

Biden’s proposal would set the US combined corporate tax rate at 32.4 percent, which would be the highest rate under the Organization for Economic Co-operation and Development (OECD). The group includes nations in North America and Europe as well as Australia and New Zealand.

Such an increase in the US corporate tax rate would, according to the Tax Foundation, incentivize companies to leave the US and reduce workers’ wages and economic output.

However, US companies have the option to deduct corporate tax paid to states, which lowers their federal corporate tax rate, according to the study.

Combined corporate tax under the Biden Plan

Status Combined state, national corporate tax rate under the Biden Plan Rank (highest to lowest)
New Jersey 36.3% 1
Pennsylvania 35.2% 2
Iowa 35.1% 3 (tie)
Minnesota 35.1% 3 (tie)
Alaska 34.8% 5 (tie)
Illinois 34.8% 5 (tie)
California 34.4% 7 (tie)
Maine 34.4% 7 (tie)
Delaware 34.3% 9
Vermont 34.1% 10
Maryland 33.9% 11
Massachusetts 33.8% 12
Wisconsin 33.7% 13th
Nebraska 33.6% 14th
New Hampshire 33.5% 15 (tie)
Oregon 33.5% 15 (tie)
Connecticut 33.4% 17th
Idaho 33.0% 18 (tie)
Kansas 33.0% 18 (tie)
Rhode Island 33.0% 20th
Montana 32.9% 21
new York 32.7% 22 (tie)
Tennessee 32.7% 22 (tie)
Hawaii 32.6% 24 (tie)
Louisiana 32.6% 24 (tie)
Arkansas 32.5% 26th
Michigan 32.3% 27 (tie)
Oklahoma 32.3% 27 (tie)
Virginia 32.3% 27 (tie)
West Virginia 32.3% 27 (tie)
New Mexico 32.2% 31
Georgia 32.1% 32
Indiana 31.8% 33
Alabama 31.7% 34
Kentucky 31.6% 35 (tie)
Mississippi 31.6% 35 (tie)
South carolina 31.6% 35 (tie)
Utah 31.6% 35 (tie)
Arizona 31.5% 39
Colorado 31.3% 40
Florida 31.2% 41
North Dakota 31.1% 42
Missouri 30.6% 43
North Carolina 29.8% 44
Nevada 28.0% 45 (tie)
Ohio 28.0% 45 (tie)
South Dakota 28.0% 45 (tie)
Texas 28.0% 45 (tie)
Washington 28.0% 45 (tie)
Wyoming 28.0% 45 (tie)

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