5 States with the Lowest Business Taxes

2. South Dakota

2023 State Business Tax Climate Index Score: 7.49

South Dakota does not impose any corporate tax or any gross receipt tax. Along with Wyoming, South Dakota has been able to phase out corporate taxes. It is one of those states that does not charge any personal income tax as well. The state has a sales tax of 4.5% that can be increased by as much as 4.5% further by local authorities. The average combined state and local sales tax stands at 6.4%. The state charges a 30-cent tax per gallon of gasoline and collects $1,720 per capita through the collection of state and local general sales tax.