For the eighth year in a row, New Jersey has been ranked as the least competitive state in the region according to the 2026 Regional Business Climate Analysis released Wednesday by the New Jersey Business & Industry Association (NJBIA).
The annual study, which evaluates six business cost drivers across seven states, gave New Jersey an overall score of 12 points, placing it at the bottom of the regional rankings. Pennsylvania secured the top spot for the second consecutive year with a score of 34, followed by Maryland (32) and Delaware (31).
The analysis highlights New Jersey’s status as a regional outlier regarding its tax structure:
- Corporate Tax Rate: New Jersey maintains the highest top corporate tax rate in the nation at 11.5%.
- Property Taxes: The state has the highest property tax burden when measured as a percentage of personal income at 4.38%.
- Income & Sales Taxes: New Jersey finished with the second-highest top income tax rate (10.75%) and the second-highest combined state sales tax rate (6.6%).
NJBIA President and CEO Michele Siekerka noted that these tax burdens are directly impacting the state’s economy. “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,” Siekerka said. She further criticized proposed legislation like the Climate Superfund Act, arguing that such “extreme burdens” only serve to cement the state’s reputation as one of the least business-friendly in the country.
The report, prepared by NJBIA Vice President of Government Affairs Althea Ford and Research Analyst Jack Ramirez, serves as a prompt for state lawmakers to pursue structural changes.
“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,” Ford said.
Siekerka urged state leaders to prioritize a “true reform agenda” once the current budget season concludes on June 30, emphasizing that the state must proactively break down barriers to job growth to remain competitive with its neighbors.
