S-Corp Tax by State 2026: 50 States, DC, and the Six That Change the Answer
32 states recognize the federal S-election cleanly. 18 add their own twist. Six genuinely change the answer to whether the S-election saves money. If you operate in one of those six, run the numbers before filing Form 2553.
The Six States That Change the Answer
All 50 States + DC: Complete Reference Table
Sources: state department of revenue websites, verified April 2026. Rates and thresholds change annually; confirm current rules before filing.
| State | Recognizes Federal S-Election | Entity-Level S-Corp Tax | Min Franchise/Annual Tax | State Form Required | Break-Even Impact |
|---|---|---|---|---|---|
| AL Alabama | Yes | None | $100 minimum privilege tax | None | Low |
| AK Alaska | Yes | None | None | None | None |
| AZ Arizona | Yes | None | $50 | None | Low |
| AR Arkansas | Yes (state election required) | None | $150 | State S-election letter required | Low |
| CA California | Yes | 1.5% of S-Corp net income | $800 minimum franchise tax | None | HIGH |
| CO Colorado | Yes | None | None | None | Low |
| CT Connecticut | Yes | None | $250 minimum business entity tax | None | Low |
| DE Delaware | Yes | None | $300 annual LLC tax (separate from S-Corp) | None | Low |
| FL Florida | Yes | None | None ($138.75 annual report) | None | None |
| GA Georgia | Yes | None | None | None | Low |
| HI Hawaii | Yes | None | $25 minimum fee | None | Moderate |
| ID Idaho | Yes | None | None | None | Low |
| IL Illinois | Yes | None | $75 replacement tax filing | None | Low |
| IN Indiana | Yes | None | None | None | Low |
| IA Iowa | Yes | None | None | None | Moderate |
| KS Kansas | Yes | None | None | None | Low |
| KY Kentucky | Yes | LLET (entity-level tax, may apply) | Varies | None | Moderate |
| LA Louisiana | Yes | None | $110 minimum corporation franchise | None | Low |
| ME Maine | Yes | None | None | None | Moderate |
| MD Maryland | Yes | None | None ($300 personal property return) | None | Moderate |
| MA Massachusetts | Yes | None | $456 minimum excise | None | High |
| MI Michigan | Yes | None | None | None | Low |
| MN Minnesota | Yes | None | None | None | Moderate-High |
| MS Mississippi | Yes | None | None | None | Low |
| MO Missouri | Yes | None | None | None | Low |
| MT Montana | Yes | None | None | None | Moderate |
| NE Nebraska | Yes | None | None | None | Moderate |
| NV Nevada | Yes | None | Business license $500/yr | None | None |
| NH New Hampshire | Yes | BPT 7.5% + BET 0.55% | ~$2,000 minimum effect | None | HIGH |
| NJ New Jersey | Yes (state election required) | None (but CBT filing required) | $500 minimum CBT | CBT-2553 required | High |
| NM New Mexico | Yes | None | None | None | Low |
| NY New York | Yes (state election required) | Fixed dollar minimum tax ($25-$4,500 based on receipts) | $25-$4,500 per receipts tier | CT-6 required | HIGH |
| NC North Carolina | Yes | None | None | None | Low |
| ND North Dakota | Yes | None | None | None | Low |
| OH Ohio | Yes | CAT (Commercial Activity Tax) above $150k | Varies above threshold | None | Low-Moderate |
| OK Oklahoma | Yes | None | None | None | Low |
| OR Oregon | Yes | CAT (Corporate Activity Tax) for large businesses | Varies | None | High |
| PA Pennsylvania | Yes | None (but CNIT may apply) | None | None | Low |
| RI Rhode Island | Yes | None | $500 minimum corporate tax | None | Moderate |
| SC South Carolina | Yes | None | None | None | Low |
| SD South Dakota | Yes | None | None | None | None |
| TN Tennessee | Yes | F&E: Excise 6.5% net income + Franchise 0.25% net worth | $100 minimum excise + $100 minimum franchise | None | HIGH |
| TX Texas | Yes | Margin tax (franchise) above ~$2.47M revenue threshold | None below threshold | None | None-Low |
| UT Utah | Yes | None | $100 minimum tax | None | Low |
| VT Vermont | Yes | None | $250 minimum income tax | None | Moderate |
| VA Virginia | Yes | None | None | None | Low |
| WA Washington | Yes | None | B&O tax (gross receipts, not income) | None | Low |
| WV West Virginia | Yes | None | None | None | Moderate |
| WI Wisconsin | Yes | None | None | Form 5S required | Moderate |
| WY Wyoming | Yes | None | None | None | None |
| DC Washington DC | No - treats as C-Corp | DC Franchise Tax applies as C-Corp | $250 minimum | N/A | CRITICAL |
No-Income-Tax States (Best for S-Corp)
States with no personal income tax mean the federal SE tax savings are not partially offset by state tax considerations. Texas is below the franchise tax threshold for most small businesses. Florida, Washington, Nevada, South Dakota, Wyoming, and Alaska have no state income tax and minimal S-Corp entity costs.
noincometaxstates.com has the full breakdown of no-income-tax states and their business tax implications.
The "Form in Delaware, Operate Elsewhere" Non-Issue for LLCs
Unlike C-Corps, LLCs electing S-Corp have no meaningful tax advantage from Delaware formation. If you form in Delaware but operate in California, you pay Delaware's $300 annual LLC tax AND California's $800 minimum franchise tax plus the 1.5% entity-level S-Corp tax. For LLCs, form in your operating state unless you have a specific privacy or creditor-protection reason (Wyoming, Nevada, and New Mexico are the alternatives for LLC privacy).