New Jersey: Why It Ranks Last for Business Taxes

The Tax Burden

New Jersey ranks #50 (dead last) in the Tax Foundation's business tax climate index. Here is why:

Corporate tax: 11.5% — highest in the nation
Personal income tax: Up to 10.75%
Sales tax: 6.625%
Property tax: Highest in the nation at $8,797 average

Why Businesses Stay

Despite the tax burden, NJ benefits from proximity to New York City, a highly educated workforce, and strong infrastructure. For some businesses, location advantages outweigh tax costs.

Strategies

Many NJ business owners form LLCs in Delaware or Wyoming while maintaining operations in NJ. However, if you have nexus in NJ, you still owe NJ taxes. See NJ tax estimates.