5 States with the Lowest Business Taxes

3. Alaska

2023 State Business Tax Climate Index Score: 7.23

In Alaska, there is no individual income tax, but the state imposes a tax on business income through a progressive corporate tax system, with tax rates that currently range from 0% to 9.4%. The first $25,000 of taxable income is taxed at 0%, and the tax rate increases gradually until reaching 9.4% for taxable income portions of $222,000 or more. Although the state does not have a state sales tax, there is a maximum local sales tax rate of 7.5%, and the average combined rate of state and local sales tax is 1.76%.