On top of this, corporations in the United States pay federal corporate income taxes levied at a rate of 21%. Putting state corporate income tax rates together with the federal rate and accounting for deductions, we get the number shown in Figure 1. Minnesota has the third highest combined rate of federal and state corporate taxes in the United States.
In a globalized world, Minnesota is not just in competition with neighboring states but with other countries. Figure 2 shows how our state’s combined rate of state and federal taxes compares with the central and sub-central government corporate tax rate across member nations of the Organisation for Economic Co-operation and Development (OECD).