LLC Tax Policies in 2023: A State-by-State Guide to Corporate Tax

When starting a business, one of the most important decisions you’ll make is deciding which of legal entity to form.

One popular option is a Limited Liability Company (LLC).

LLCs offer the simplicity of a Partnership and the tax benefits of a Corporation. However, depending on where you are operating, the taxs you may be subject to can vary significantly.

List of States and their Corporate Tax Policies for LLCs

Below, we provide a comprehensive list of every state in the United States (including D.C.) and whether or not they automatically apply Corporate Tax (or similar taxes) on LLCs.

It’s important to note that state tax laws can change from time to time. Therefore, it’s always a good idea to check with the relevant office for the most updated information on their Corporate Tax laws.

Links have conveniently been provided so you can find more information about LLCs and the various taxes your business may be subject to.

States WITH Corporate Tax for LLCs

1. California: LLCs in California are subject to an $800 annual tax. California Franchise Tax Board

2. District of Columbia (Washington D.C.): LLCs in DC are subject to a franchise tax of 9.975% of their net income. District of Columbia Office of Tax and Revenue

3. Illinois: LLCs in Illinois are subject to a 7% tax on their net income. Illinois Department of Revenue

4. Iowa: LLCs in Iowa are subject to a 12% tax on their net income. Iowa Department of Revenue

5. Minnesota: LLCs in Minnesota are subject to a 9.8% tax on their net income. Minnesota Department of Revenue

6. Nebraska: LLCs in Nebraska are subject to a 5.58% tax on their net income. Nebraska Department of Revenue

7. New York: LLCs in New York are considered Corporations for tax purposes and are subject to Corporate tax rates which vary depending on the business. New York State Department of Taxation and Finance

8. North Carolina: LLCs in North Carolina are subject to a 3% tax on their net income. North Carolina Department of Revenue

9. Oklahoma: LLCs in Oklahoma are subject to a 6% tax on their net income. Oklahoma Tax Commission

10. Oregon: LLCs in Oregon are subject to a $150 minimum tax. Oregon Department of Revenue

States WITOUT Corporate Taxes for LLCs

It’s important to note that while these states do not have Corporate Tax for LLCs, they may have other taxes or fees that apply. Additionally, some states have special rules or requirements for LLCs which is why it’s always important to consult with a legal or tax professional before you form an LLC.

1. Alabama: Alabama Department of Revenue

2. Alaska: Alaska Department of Revenue

3. Arizona: Arizona Department of Revenue

4. Arkansas: Arkansas Department of Finance and Administration

5. Colorado: Colorado Department of Revenue

6. Connecticut: Connecticut Department of Revenue Services

7. Delaware: Delaware Division of Revenue

8. Florida: Florida Department of Revenue

9. Georgia: Georgia Department of Revenue

10. Hawaii: Hawaii Department of Revenue

11. Idaho: Idaho State Tax Commission

12. Indiana: Indiana Department of Revenue