District of Columbia, New Hampshire, New York, Tennessee each require something beyond the federal election, or do not recognize it for entity-level tax at all. New York is the most expensive: without an approved Form CT-6, New York taxes the corporation as a C corporation while the IRS treats it as an S corporation — genuine double taxation.
S-corp treatment by state
Filing Form 2553 settles your federal tax treatment. It does not necessarily settle your state one. A handful of states want a separate election, several tax the entity regardless, and every state wants you registered before you run payroll.
Where people lose the most money
All 51 jurisdictions
| State | Treatment | Tax the entity still owes |
|---|---|---|
| Alabama | Recognized automatically | No entity-level income tax on pass-through income; the Alabama Business Privilege Tax (BPT) technically still applies but is fully exempt (and no return is required) when the computed tax is $100 or less — which covers most small S corps. |
| Alaska | No personal income tax | No personal income tax. Alaska does have a graduated corporate net income tax (0% to 9.4%), from which S corporations are generally excluded; no franchise or net-worth tax. |
| Arizona | Recognized automatically | No general entity-level tax. Arizona corporate income tax (4.9%) reaches only income taxed at the federal corporate level. No franchise or net-worth tax. |
| Arkansas | Recognized automatically | No Arkansas income tax at the entity level, but the Arkansas franchise tax (Secretary of State) still applies every year regardless of S status. |
| California | Recognized automatically | 1.5% S corporation franchise tax on California net income, with an $800 annual minimum franchise tax. |
| Colorado | Recognized automatically | No franchise tax, no net-worth tax and no minimum tax. The only entity-level Colorado income tax is voluntary, via the SALT Parity Act PTET election. |
| Connecticut | Recognized automatically | No franchise or net-worth tax on S corps. The 6.99% Pass-Through Entity Tax is ELECTIVE (optional) for tax years beginning on or after 1/1/2024; the base composite return CT-1065/CT-1120SI is still mandatory. |
| Delaware | Recognized automatically | No corporate income tax on the S corp itself, but Delaware franchise tax + annual report to the Division of Corporations (min $175 or $400, plus $50 report fee, due March 1), a Delaware business license and gross receipts tax if it actually operates in-state, and mandatory 6.60% prepayments of personal income tax for nonresident shareholders. |
| District of Columbia | Not recognized for entity tax | DC Corporation Franchise Tax on Form D-20 at 8.25% of DC taxable income, with a hard minimum tax of $250 (DC gross receipts $1M or less) or $1,000 (DC gross receipts over $1M) — payable by every S corp regardless of federal pass-through status. |
| Florida | No personal income tax | None in the normal case. Florida corporate income tax (5.5%) applies to an S corp only if it pays federal income tax on Line 23c of Form 1120S. There is no franchise tax, no net worth tax, and no minimum tax. |
| Georgia | Form 600S-CA (Consent Agreement of Nonresident Shareholders of S Corporations) — required only if there are nonresident shareholders; there is no corporate-level Georgia S election form. | Georgia net worth tax — graduated from $0 (net worth of $100,000 or less) to a $5,000 maximum (net worth over $22,000,000), reported on Form 600S. No entity-level income tax on the S corp's pass-through income unless the entity elects PTE treatment or loses S recognition. |
| Hawaii | Recognized automatically | No entity-level income tax on ordinary S corp income, but the Hawaii General Excise Tax (GET) applies to gross income regardless of entity type. |
| Idaho | Recognized automatically | $20 minimum tax owed by virtually every Idaho S corp, plus a $10 Permanent Building Fund tax in limited cases, plus 5.3% tax on composite/ABE income and on built-in gains and excess net passive income. |
| Illinois | Recognized automatically | 1.5% Personal Property Replacement Tax on net Illinois income; the corporate franchise tax still exists but the first $10,000 of liability is exempt from 1/1/2025. |
| Indiana | Recognized automatically | No general entity-level income tax, but Indiana AGI tax reaches federally taxed built-in gains and passive income, and a composite return for nonresident shareholders is mandatory. |
| Iowa | Recognized automatically | No Iowa income or franchise tax on an ordinary S corp by default, BUT Iowa Code 422.16B makes composite filing and tax remittance on behalf of nonresident shareholders MANDATORY — a real entity-level liability. |
| Kansas | Recognized automatically | None for an ordinary S corp — Kansas has no corporation franchise tax. The only entity-level tax is the OPTIONAL SALT Parity Act election (5.58% for 2026); banks/S&Ls pay privilege tax instead. |
| Kentucky | Recognized automatically | Limited Liability Entity Tax (LLET) applies to every Kentucky S corp with a $175 annual minimum, regardless of profit or loss. An optional pass-through entity tax election is also available. |
| Louisiana | Recognized automatically | For periods beginning on/after 1/1/2026: no Louisiana corporation income tax on the S corp and no franchise tax (repealed). An informational CIT-620 is still mandatory and must be e-filed. |
| Maine | Recognized automatically | None in the normal case — no franchise tax, no minimum tax, no annual entity fee. Maine corporate income tax (3.5%–8.93%) applies only if the S corp has federal taxable income at the corporate level. |
| Maryland | Recognized automatically | Mandatory nonresident-member pass-through entity tax (Form 510) plus an optional electing PTE tax on all members (Form 511). No franchise or net-worth tax, but a $300 SDAT annual report fee applies to every corporation and LLC. |
| Massachusetts | Recognized automatically | Massachusetts corporate excise: the GREATER OF (a) the non-income measure of $2.60 per $1,000 of Massachusetts tangible property or net worth plus the net-income measure, or (b) the $456 minimum excise — owed every year, including loss years. |
| Michigan | Recognized automatically | No Corporate Income Tax, no franchise tax, no gross receipts tax on an S corp. The only Michigan entity-level income tax is the ELECTIVE flow-through entity (FTE) tax at 4.25% for 2026. Recurring non-income obligation: the LARA annual report, Form CSCL/CD-2500, $25 if filed on time by May 15. |
| Minnesota | Recognized automatically | Minnesota minimum fee based on Minnesota property plus payroll plus sales; $0 below the threshold, which is $1,280,000 for 2026. |
| Mississippi | Recognized automatically | S corps are exempt from Mississippi income tax by statute but DO pay Mississippi franchise tax on capital, with a $25 minimum. Composite and electing-PTE returns pay tax at the entity level. |
| Missouri | Recognized automatically | None. Missouri's corporate franchise tax was fully phased out effective January 1, 2016, and an S corp owes no Missouri corporate income tax at the entity level. |
| Montana | Recognized automatically | No franchise, net-worth or minimum tax on an S corporation. Entity-level liability arises only if the entity elects the 5.9% PTET, files a composite return, or must remit pass-through withholding for nonresident owners. |
| Nebraska | Recognized automatically | No Nebraska corporate income tax or franchise tax on an ordinary S corp, but mandatory nonresident-shareholder withholding (4.55% for 2026) is an entity-level obligation, plus a biennial occupation tax report to the Secretary of State. |
| Nevada | No personal income tax | No income tax, but a $500 annual State Business License for corporations plus an Annual List fee starting at $150 and scaling with authorized stock; Modified Business Tax on wages and Commerce Tax above $4M gross revenue. |
| New Hampshire | Not recognized for entity tax | Business Profits Tax at 7.5% of taxable business profits and Business Enterprise Tax at 0.55% of the enterprise value tax base; BET paid is creditable against BPT. |
| New Jersey | Recognized automatically | New Jersey Corporation Business Tax statutory minimum tax of $375–$1,500 based on New Jersey gross receipts (or $2,000 for certain affiliated groups), owed every year regardless of profit. |
| New Mexico | Recognized automatically | $50 annual corporate franchise tax owed by every S corporation, regardless of income or activity, plus 5.9% corporate income tax on any entity-level income and 4.9% withholding on nonresident owners. |
| New York | Form CT-6 | Article 9-A fixed dollar minimum (FDM) franchise tax of $25 to $4,500 based on New York receipts; the MTA surcharge does NOT apply to a New York S corporation. |
| North Carolina | Recognized automatically | North Carolina franchise tax on net worth: "$200 for the first one million dollars ($1,000,000) of the corporation's tax base and $1.50 per $1,000 (.0015) of its tax base that exceeds one million dollars," with an absolute minimum of $200 owed every year, even by an inactive corporation. |
| North Dakota | Recognized automatically | No franchise tax, net-worth tax or minimum tax. Form 60 is effectively an information/flow-through return; the only entity-level cash obligation is 2.5% withholding on nonresident shareholders (or composite tax). |
| Ohio | Recognized automatically | No franchise or net-worth tax on S corps. Elective entity-level tax (IT 4738) at 3% for 2026, or mandatory IT 1140 withholding at 3%. Separate Commercial Activity Tax on gross receipts and separate municipal net profits taxes. |
| Oklahoma | Recognized automatically | No entity-level income tax in the normal case and NO franchise tax (repealed after tax year 2023) — but mandatory 4.75% withholding on nonresident shareholders' distributive shares is a real entity-level cash obligation. |
| Oregon | Recognized automatically | $150 minimum corporation excise tax for every S corp doing business in Oregon, plus the Corporate Activity Tax (CAT) above $1M of Oregon commercial activity. |
| Pennsylvania | Recognized automatically | Essentially no PA entity-level income tax: the capital stock/franchise tax was eliminated for tax years beginning January 1, 2016 and after, and a PA S corp owes corporate net income tax only to the extent of built-in gains (7.99% for 2025, 7.49% for 2026). The recurring obligations are nonresident shareholder withholding at 3.07% and a $7 Department of State annual report. |
| Rhode Island | Recognized automatically | $400 annual minimum corporate tax, owed by every Rhode Island S corp regardless of income or activity. Optional pass-through entity election tax at 5.99% is also available. |
| South Carolina | Recognized automatically | No franchise tax on income, but a one-time CL-1 initial report fee applies, and the entity may elect to pay the 3% active trade or business income tax itself under § 12-6-545(G). |
| South Dakota | No personal income tax | No income tax and no franchise tax on ordinary businesses. The only recurring state-level obligation is the Secretary of State annual report: $55 filed online, $70 on paper. |
| Tennessee | Not recognized for entity tax | Tennessee franchise and excise tax, owed in full by S corporations: excise tax at 6.5% of Tennessee taxable income (after a $50,000 standard deduction from net earnings) plus franchise tax at 0.25% of Tennessee net worth, minimum $100. |
| Texas | No personal income tax | Texas franchise (margin) tax — 0.75% standard / 0.375% retail-wholesale, with a $2,650,000 no-tax-due threshold for the 2026 report year; a Public Information Report is still required even when no tax is due. |
| Utah | Recognized automatically | NO minimum tax — Utah's $100 minimum (privilege) tax expressly does NOT apply to S corporations. The only mandatory entity-level cash outlay is Schedule N pass-through withholding for non-individual and nonresident shareholders. |
| Vermont | Recognized automatically | $250 minimum annual entity tax on every Vermont pass-through entity, owed regardless of income. No franchise or net-worth tax. Vermont has NO pass-through entity tax (no SALT-cap workaround). |
| Virginia | Recognized automatically | No Virginia franchise, net worth, or entity income tax on an S corp, but mandatory 5% withholding on nonresident owners' Virginia-source income (due on the ORIGINAL April 15 due date, not the extended one), an optional 5.75% elective PTET, and an SCC annual registration fee based on authorized shares ($100 for 1–5,000 shares). |
| Washington | No personal income tax | B&O gross receipts tax applies at the entity level regardless of S status; no income tax and no franchise tax. |
| West Virginia | Recognized automatically | No franchise or net-worth tax (West Virginia's business franchise tax was fully phased out). Mandatory nonresident withholding at the top individual rate, plus an optional elective pass-through entity tax at the same rate. |
| Wisconsin | Recognized automatically | Economic development surcharge: greater of $25 or 0.2% of Wisconsin net income, capped at $9,800 — but only if gross receipts are $4 million or more. |
| Wyoming | No personal income tax | No income tax. An annual report license tax applies: the greater of $60 or $0.0002 per dollar of Wyoming-located capital, property and assets, due on the first day of the entity's registration month. |
Showing 51 of 51 jurisdictions.
Two rules that most published guidance still gets wrong: New Jersey eliminated its separate election (Form CBT-2553) for privilege periods beginning on or after December 22, 2022, and Arkansas Form AR1103 has been obsolete since tax years beginning January 1, 2018. If a source tells you to file either, it is out of date.
Researched from official state departments of revenue, franchise tax boards, secretaries of state and statutes. Verified July 30, 2026. State rules change — confirm with your state before filing if you are close to a deadline. Read our disclaimer.