Most Tax-Friendly States for Business

2026

Top 10 US states for small business and pass-through entities in 2026, ranked by combined corporate tax + LLC fee + sales tax + property tax burden.

Written and reviewed by Konstantin Iakovlev · Methodology · Updated

Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.

Ranked by overall small-business tax friendliness

Combined: corporate tax + pass-through entity tax + property tax + sales tax + compliance burden. Sourced from Tax Foundation State Business Tax Climate Index + individual state revenue departments.

  1. 1

    Wyoming

    Wyoming — #1 in Tax Foundation Business Tax Climate Index (multiple years). No corporate income tax, no franchise tax, no LLC franchise tax. $60 annual LLC report fee.

    paycheck → income tax → property tax → cost of living →
  2. 2

    South Dakota

    South Dakota — No corporate income tax, no individual income tax (so pass-throughs untaxed at state level). Low LLC formation/maintenance costs.

    paycheck → income tax → property tax → cost of living →
  3. 3

    Alaska

    Alaska — No state sales tax + no individual income tax. 9.4% top corporate tax (high) but only on corporations, not pass-throughs.

    paycheck → income tax → property tax → cost of living →
  4. 4

    Florida

    Florida — No individual income tax (so pass-through entities untaxed). 5.5% corporate income tax (moderate). Quick LLC setup ($125 filing fee).

    paycheck → income tax → property tax → cost of living →
  5. 5

    Montana

    Montana — No state sales tax (one of just five). 6.75% corporate tax. Moderate LLC fees ($35 annual).

    paycheck → income tax → property tax → cost of living →
  6. 6

    New Hampshire

    New Hampshire — No state sales tax + no income tax on wages. 7.5% Business Profits Tax + 0.55% Business Enterprise Tax (BPT/BET) on business income.

    paycheck → income tax → property tax → cost of living →
  7. 7

    Nevada

    Nevada — No corporate income tax, no individual income tax. 1.378% Modified Business Tax on payroll above $50K/quarter. $200/year LLC list fee.

    paycheck → income tax → property tax → cost of living →
  8. 8

    Tennessee

    Tennessee — No individual income tax. 6.5% corporate excise tax + 0.25% franchise tax. $300/year LLC fee.

    paycheck → income tax → property tax → cost of living →
  9. 9

    Utah

    Utah — 4.55% flat corporate tax (matches individual flat rate). Low LLC fees ($70 setup, $20 annual). Strong tech-economy ecosystem (Silicon Slopes).

    paycheck → income tax → property tax → cost of living →
  10. 10

    North Dakota

    North Dakota — Low individual progressive (1.95%-2.5% top) and 4.31% top corporate. $50 LLC setup. Bakken oil revenue funds infrastructure.

    paycheck → income tax → property tax → cost of living →

Methodology note: This listicle is curated based on Q1 2026 data verified against each state's Department of Revenue + Tax Foundation 50-state reports. Rankings reflect tax structure and are not investment advice. Cost of living, employment opportunities, climate, and personal preferences should also factor into relocation decisions.