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The basics:

• NJBIA ranks New Jersey last among 7 regional states for business climate
• State has the region’s highest corporate tax rate and property tax burden
• Pennsylvania holds first place in 2026 Regional Business Climate Analysis
• NJBIA calls for reforms to improve affordability, competitiveness

New Jersey remains the least competitive state in the region for business costs and taxes for the eighth consecutive year. That’s according to the New Jersey Business & Industry Association‘s 2026 Regional Business Climate Analysis, released June 9.

The annual study compares six key business cost drivers across seven Northeast and Mid-Atlantic states:

• Minimum wage rates
• Top income tax rates
• Top corporate tax rates
• Combined state and local sales tax rates
• Property taxes as a percentage of personal income
• Maximum unemployment insurance contributions per employee

New Jersey received an overall score of 12 points, finishing last among the seven states. Pennsylvania ranked first with 34 points, followed by Maryland (32), Delaware (31), Massachusetts (22), Connecticut (17) and New York (16).

The report found New Jersey continues to stand out for having the region’s highest corporate tax rate at 11.5%. And the highest property tax burden, with costs equaling 4.38% of personal income. The state also ranks second-highest for both top income tax rates and combined sales tax rates.

Doing the math

“As we see some of our larger employers challenged or choosing not to grow in New Jersey, these are often the numbers behind those situations,” said NJBIA President and CEO Michele Siekerka.

“New Jersey continues to have some of the highest tax burdens and costs in the region, and in the nation in some categories. And unfortunately, our lawmakers are still considering bills like the Climate Superfund Act that retroactively and likely unconstitutionally penalize certain lawful companies $50 billion,” she added.

“It is this combination of high taxation and extreme burdens that only enhances our unfortunate reputation of being one of the least business-friendly states in the nation.”

The highest corporate business tax in the U.S.

The analysis notes New Jersey’s 11.5% corporate business tax remains the highest in the nation following the implementation of the corporate transit fee in 2024 under Gov. Phil Murphy. The CTF reversed a previous sunset of the corporate business tax surcharge of 2.5%. Delaware’s 8.7% rate is the next highest in the region, while Pennsylvania’s 7.49% corporate tax rate is scheduled to decline to 4.99% by 2031.

NJBIA Vice President of Government Affairs Althea Ford said the findings underscore businesses’ ongoing concerns.

“These results highlight the serious affordability and regional competitiveness challenges that our job creators face in New Jersey, year in and year out,” said Ford.

“While we are encouraged that there is more awareness of these competitive challenges, New Jersey really does need to either individually or comprehensively reduce our high business cost-drivers.”

Wakeup call?

New York posted the region’s highest minimum wage rate, top income tax rate and combined sales tax rate, but offset those costs with the region’s lowest corporate tax rate at 7.25%. New Jersey’s minimum wage of $15.92 per hour ranked third behind New York ($17) and Connecticut ($16.94).

For the fourth consecutive year, New Jersey’s top income tax rate of 10.75% trailed only New York (10.9%). The state’s combined sales tax rate of 6.6% was also second-highest in the region, behind New York’s 8.54%.

[I]t’s time for a true reform agenda in New Jersey.
– Michele Siekerka, president and CEO, NJBIA

Siekerka said the findings should serve as a call for policymakers to pursue broader reforms after the state budget process concludes.

“This is why it’s time for a true reform agenda in New Jersey,” said Siekerka.

“Once budget season ends June 30, it’s time to immediately pivot to a comprehensive process to break down these barriers to job growth. That can only happen through a much-needed proactive reform agenda.”

The full analysis can be found here.