For the seventh-straight year, New Jersey ranked last in the New Jersey Business & Industry Association‘s Regional Business Climate Analysis.

The 2025 report, prepared by NJBIA Vice President of Government Affairs Elissa Frank, scored six individual business cost drivers that measure business competitiveness in seven states: New Jersey, Connecticut, Delaware, Maryland, Massachusetts, New York and Pennsylvania.

Those six categories, with Garden State figures, include:

• Minimum wage rate $15.49
• Top income tax rate 10.75%
• Top corporate tax rate 11.5%
• State sales tax plus avg. local rate 6.6%
• Property tax paid as a % of personal income 4.81%
• Maximum UI contribution per employee $2,771.2

In each of those categories, the states are scored from least competitive (1) to most competitive (7).

New Jersey earned a total of 10 – far behind the next states – in its seventh-consecutive worst business climate finish. New York and Connecticut each had 17.

The NJBIA noted that the New Jersey remains an extreme regional outlier — with the top corporate tax rate and maximum unemployment insurance tax contribution per employees, as well as the highest property tax paid as a percentage of personal income. The Garden State also boasts the second-highest top income tax rate as well as combined state sales tax rate.

“The longer New Jersey continues to have the highest tax burdens and costs in the region, the more our state enhances our unfortunate reputation of not being business friendly,” said NJBIA President and CEO Michele Siekerka.

No. 1

Pennsylvania garnered the top spot regionally with a score of 35, followed by Maryland (34), Delaware (33), Massachusetts (26), New York (17), Connecticut (17) and then New Jersey (10).

“These results are perhaps more disappointing as New Jersey abandoned its decision to improve upon its highest-in-the-nation corporate business tax rate in 2024,” said Siekerka. She pointed to the corporate transit fee, which emerged as a key budget battle issue last year, as NJBIZ extensively reported on. “Other states are well ahead of us with their corporate tax rates, while others continue to lower them, understanding that corporate tax rates affect regional competitiveness.”

After New Jersey, the next-highest top corporate tax rate in the region to New Jersey’s 11.5%, which includes the aforementioned 2.5% CTF surtax, is Delaware’s 8.7% (also has a zero percent combined sales tax rate). Meanwhile, Pennsylvania’s is 7.99% — and set to dip downward, eventually, to 4.99%.

“These results are another unfortunate reminder of the very serious affordability and regional competitiveness challenges our job creators face in New Jersey, year in and year out,” said Frank. “Until we at least try to either individually or comprehensively reduce our high business cost-drivers, New Jersey will struggle to compete nationally and regionally with other states.”

The full NJBIA 2025 Regional Business Climate Analysis is available here.