• info@kaizencpa.com
  • Our Office: USA - Hong Kong - Shenzhen - Shanghai - Beijing - Taiwan - Singapore - Japan - UK

+852 2341 1444(Hong Kong)
+86 755 8268 4483(Shenzhen)
+65 6438 0116(Singapore)

Search for anything.

Knowledge

  • Home
  • Knowledge
  • Introduction to U.S. State Minimum Taxes

Introduction to U.S. State Minimum Taxes

2025-05-16
All companies registered in the United States are generally required to file federal income tax and state income tax, which are generally related to the company's business net income in the state. Therefore, people often mistakenly believe that if a company has operating losses or no operating income, it does not need to pay taxes. In fact, once a company is incorporated in a state, there may be some minimum taxes that need to be paid, which are not necessarily tied to the company's net income.

The following will introduce the minimum tax standards stipulated by each state and vary.

State

State Minimum Tax

 Amount

Memo

Alabama

Minimum privilege tax

US$100.00

Starting in 2023, the minimum tax owed will decrease from $100 to $50.

Alaska

N/A

N/A

N/A

Arizona

Corporation Income Tax

US$50.00

Every corporation required to file a return shall pay a $50 minimum tax in accordance with A.R.S. § 43-1111.

Arkansas

Franchise Tax

Corporations with Stock - $150
Corporations without Stock - $300
LLC or PLLC - $150




State

State Minimum Tax

 Amount

Memo

California

Minimum franchise tax / Annual tax

US$800.00

Exceptions to the first year minimum tax：
1. Corporations and SMLLC - They did not conduct any business in California during the tax year and their tax year was 15 days or fewer.
2.  For tax years beginning on or after January 1, 2021, and before January 1, 2024, LLCs  that organize, register, or file with the Secretary of State to do business in California.

Colorado

N/A

N/A

N/A

Connecticut

Corporation Income tax

US$250.00

 Corporation Business Tax Return is used to compute tax both on a net income basis and on a capital stock basis. Tax is paid on the basis that yields the higher tax.

Delaware

Franchise tax / Annual tax

Corporate Franchise Tax - $225 using the Authorized Shares Method;


Corporate Franchise Tax - $450 using the Assumed Par Value Capital Method;


LLC/LP/GP Annual tax - $350;

Corporate Franchise Tax - Maximum $200,000.00


LLCs are not required to file annual reports.

District of Columbia

Corporate Franchise tax

Gross receipts are $1 million or less - $250
Gross receipts are more than $1 million - $1000

Florida

N/A

N/A

N/A

Georgia

N/A

N/A

N/A

Hawaii

N/A

N/A

N/A

Idaho

Permanent Building Fund (PBF) tax

S corporations - minimum income tax - $20
S corporations - minimum franchise tax - $20
S corporations - PBF tax - $10 for each shareholder

Illinois

N/A

N/A

N/A

Indiana

N/A

N/A

N/A

Iowa

N/A

N/A

N/A

Kansas

N/A

N/A

N/A

Kentucky

Limited Liability Entity Tax (LLET)

US$175.00

small-business exemption to the LLET

Louisiana

N/A

N/A

N/A

Maine

N/A

N/A

N/A

Maryland

N/A

N/A

N/A

Massachusetts

Corporate Excise tax

US$456.00

Michigan

N/A

N/A

N/A

Minnesota

N/A

N/A

N/A

Mississippi

Franchise tax

US$25.00

Missouri

N/A

N/A

N/A

Montana

Corporation Income tax

US$50.00

Nebraska

N/A

N/A

N/A

Nevada

N/A

N/A

N/A

New Hampshire

N/A

N/A

N/A

New Jersey

Corporation Business tax

US$500.00

S Corporation- MINIMUM $375

New Mexico

Franchise tax

US$50.00

New York

Fixed dollar minimum tax

Fixed dollar minimum tax - $25

North Carolina

Franchise tax

US$200.00

North Dakota

N/A

N/A

N/A

Ohio

Commercial Activity Tax (CAT)

US$150.00

H.B. 33 eliminated the annual minimum tax beginning in 2024. 

Oklahoma

Oklahoma Franchise (excise) tax

Compute tax at $1.25 per $1,000.00 of capital.
The Maximum annual franchise tax is $20,000.00.

Oregon

Corporation Excise tax

US$150.00

Pennsylvania

N/A

N/A

N/A

Rhode Island

Corporation Income tax

US$400.00

South Carolina

Corporate License fee (Franchise tax)

US$25.00

South Dakota

N/A

N/A

N/A

Tennessee

Minimum Business tax & Franchise tax

Minimum Business Tax - $22
Franchise Tax - $100

Texas

N/A

N/A

N/A

Utah

Corporate Income tax & Franchise tax

Corporate income tax - $100
Franchise Tax - $100

Vermont

Business Entity Income tax

US$250.00

Virginia

N/A

N/A

N/A

Washington

N/A

N/A

N/A

West Virginia

N/A

N/A

N/A

Wisconsin

Economic Development Surcharge

US$25.00

Wyoming

State License tax

US$60.00


Disclaimer

All information in this article is only for the purpose of information sharing, instead of professional suggestion. Kaizen will not assume any responsibility for loss or damage.

WhatsApp/Line/Wechat: +852 5616 4140

Related Posts

Risks of Carrying Out Work on a U.S. B Visa

The B visa is one of the most common visas for visitors to the United States. It comes in two categories: the B-1 visa, for short-term business visits, and the B-2 visa, for tourism or medical treatment. Travelers may also be issued a combination B-1/B-2 visa, valid for both purposes. Typically, a visitor may be admitted for up to six (6) months at a time, with the possibility of requesting an extension if necessary.

Introduction to U.S. Capital Asset

A business asset refers to a valuable item owned by a company, including a wide range of categories like physical, tangible goods, such as vehicles and real estate, as well as intangible items. The U.S. tax code sections 1231, 1245, 1250, and capital assets primarily cover most of business assets. This article will provide a brief overview of the capital assets.

Type of U.S. Business Assets

Sections 1231, 1245, and 1250 of the United States Internal Revenue Code pertain to the tax treatment of gains and losses on the sale or disposition of certain types of property. This article will discuss the different types of business assets covered and depreciation of U.S. business assets.

How to Make a Job Offer of the U.S. Company III

In addition to the four employee benefits previously discussed, it is essential to consider a fifth benefit: health insurance, which represents the most significant expense associated with employee benefits in contemporary workplaces. The Affordable Care Act (ACA) stipulates that organizations employing 50 or more full-time employees are subject to a tax penalty unless they provide adequate healthcare coverage that complies with ACA standards for their full-time workforce.