Which States Rank Best for Business?

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By Michele N. Siekerka, NJBIA President and CEO On May 28, 2025

The number seven is lucky if you’re a gambler rolling dice, but decidedly unlucky if you’re superstitious and holding a broken mirror. For New Jersey taxpayers, seven should be a call to action because that’s how many years in a row NJBIA’s Regional Business Climate Analysis ranked our state at the bottom.

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

States earn a score between 1 (worst) to 5 (best) in each category and points are then tallied for an overall competitiveness score. For the seventh time, New Jersey ranked worst, scoring only 10 points compared to the most competitive state in the region, Pennsylvania, which earned 35 points. 

New Jersey is an extreme outlier in two of the six categories: The Corporation Business Tax (CBT) and the maximum Unemployment Insurance Tax contribution per employee. New Jersey’s top CBT rate (11.5%) is highest in the nation and far exceeds that of the state with the second-highest corporate tax in our region, Delaware (8.7%). 

On unemployment insurance taxes, New Jersey again far exceeds neighboring states. Here, a business’ maximum per employee UI contribution is set at $2,771.20. Contrast that to Maryland, where businesses pay a maximum of $637.50 per worker.

High New Jersey property taxes are also a burden. Here, property taxes comprise 4.81% of personal income – the worst in the region. By comparison, property taxes are 1.92% of personal income in Delaware and 2.67% of personal income in Pennsylvania, the two states most competitive in this category in our region.

New Jersey’s top income tax rate (10.75%) is the second highest in the region behind New York (10.9%). Still, New Jersey’s top rate is more than triple the flat 3.0% income tax rate of our other neighbor, Pennsylvania, which ranks best in our region.

Two other cost drivers studied were the minimum wage and the sales tax. New Jersey’s $15.49 per hour minimum wage is third highest in the region behind New York ($15.50) and Connecticut ($16.45). New Jersey also had the second highest sales tax in the region.

Finishing at the bottom in overall business competitiveness rankings for the seventh year in a row should be a wake-up call for our elected representatives. The longer New Jersey maintains the highest tax burdens and business costs in the region, the more it cements our reputation for being unfriendly to business.

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