Managing a successful business requires the navigation of a complex maze of federal, state and local rules and regulations. Tax policies are no less of these burdens given the mixing of corporate income tax, sales tax, property taxes, individual income taxes and unemployment taxes that can be imposed.
But some states are particularly more friendly to business than others.
Wyoming, South Dakota and Alaska are at the top of the list in the latest tax climate index of the Tax Foundation, which lists the 50 countries.
Main receipts
- Not all countries impose all the most common business taxes.
- Taxes in some northeast US states are higher than others.
- Eight states have no tax on individual income since tax year 2025.
- Alaska, Montana and New Hampshire do not impose state -level sales taxes.
- Numerous federal tax loans and programs can relieve a little of the stroke, no matter where you do business.
Best countries for business taxes
The Tax Foundation publishes an annual state business tax index, comparing all 50 countries based on five factors: tax on individual income, sales tax, corporate income tax, property tax and unemployment insurance tax.
The 2024 report appoints these states as the first 10:
- Wyoming
- South Dakota
- Alaska
- Florida
- Montana
- New Hampshire
- Nevada
- Utah
- North Carolina
- Indiana
Each has its own mix of tax -friendly tax deductions and policies, each of which may be more important than others for you and your business.
Individual income tax
If you live in the state in which you do business, individual tax rates on state income are an important factor. Seven states did not impose any tax revenue in the year of taxation 2024: Alaska, Florida, Nevada, South Dakota, Tennesses, Texas and Wyoming. Washington taxes only capital gains.
Florida, South Dakota, Wyoming, Nevada and New Hampshire appear in Top 10 of the Tax Foundation.
Important
Indiana has gradually reduced her individual level of income tax. Just 3.05% since tax year 2024. However, all Indiana counties impose income tax.
Corporate income tax
Florida, South Dakota and Wyoming not only save your personal income from taxation. They do not impose a corporate income tax.
Among states that make a corporate tax, North Carolina imposes a rate of only 2.5% compared to 5.5% set by Florida.
New Hampshire allows businesses to deduct business interest costs not allowed under federal tax law.
Sales tax
The sales tax is paid by customers at the time of sale. This additional cost can affect sales, especially if your customers live a short car from a lower tax jurisdiction.
Sales taxes can be imposed by the state or local government, or both.
Alaska, Montana and New Hampshire have no state -level sales taxes. The South Dakota sales tax rate is 4.2% since 2025 but allows municipalities to increase their sales tax at the top. Indiana sales tax is a worthy of 7%valid. Something something to consider if you are doing business as a retailer.
Unemployment insurance
No state can save your business from the unemployment security tax, but some states are more beloved than others.
The unemployment insurance program is a complex system managed by the tax authorities at both federal and state levels. It is difficult to determine a single rate for any state.
However, some states are clearly more beloved than others. Business owners in North Carolina travel well. Those in Alaska have a particularly heavy load.
Property tax
The property tax is a major factor if you own your home, your business property, or both. The Tax Foundation has also compiled a 2024 report states according to this burden.
Its list of states with lower property taxes includes Alaska, Florida, South Dakota, Tennesses, Texas, Washington and Wyoming,
Since property taxes can be charged by both the state and the county, this is how the tax foundation disrupts them. Lower tax rates can be found in parts of Alaska, Luiziana and Alabama. The highest rates are loaded into parts of California, New Jersey and New York.
Federal tax loans
Wherever your business is set, you can benefit from some federal provisions that are intended to facilitate the burden of taxes for businesses.
Internal Income Code (IRC) provides general business tax credit that includes a host of other credits. They include job opportunities, loans to objects and care services for children offered by employers, and qualified electric motor vehicles, among many others
You can find a full list on the IRS website along with links that lead to their qualifying details and the right forms to fill them to look for them.
Small business care tax loan allows businesses to maintain up to 50% off their costs for employee premiums. To qualify, you have to pay at least 50% of their premium costs and have less than 25 full -time employees with an average salary of not more than $ 56,000 a year.
Ultimately
A tax category can be more of a load than others in your business, so it is important to weigh that is most important to you. States like Wyoming, South Dakota and Alaska have high rankings for their business -friendly tax climate.
After all, understanding the full tax landscape of your state can help you make more informed decisions on where to create and grow your business.