(The Center Square) – West Virginia ranks near the middle of the pack, tied for 23rd, in a new ranking of state corporate income tax rates heading into 2023.
West Virginia’s 6.5% rate is tied for 23rd with Alabama and Tennessee in the Tax Foundations new rankings but local taxes in the state can also increase that rate.
“Some localities in Pennsylvania, Virginia and West Virginia likewise impose gross receipts taxes, which are generally understood to be more economically harmful than corporate income taxes,” the report said.
The top rates in the country belong to New Jersey (11.5%), Minnesota (9.8%), Illinois (9.5%) and Alaska (9.4%).
As of the ranking, 44 states have corporate income tax with Wyoming and South Dakota going without it and Nevada, Washington, Texas and Ohio using a gross receipts tax instead of corporate income tax.
West Virginia is one of 29 states, along with the District of Columbia, to use a single-rate system.
“A single-rate system minimizes the incentive for firms to engage in economically wasteful tax planning to mitigate the damage of higher marginal tax rates that some states levy as taxable income rises,” the report said.
