Digital marketing agencies across the United States are bracing for change as the proposed 2025 corporate tax reform edges closer to approval.
If passed, the reform would lower the corporate tax rate from 21% to 15%, promising significant implications for businesses — but not all states will benefit equally.
A recent analysis by DesignRush highlights the five states that stand to gain the most from the reform, and the findings reveal stark contrasts in potential savings, offering a glimpse into how these changes could positively impact digital businesses.
Delaware leads the way, with digital marketing agencies expected to save an average of $76,786 per year, thanks to an 8.44% tax benefit.
Nebraska also stands out with the highest dollar savings nationwide at $220,081 per agency, despite its slightly lower tax benefit percentage (7.36%).
Other top states benefiting from the reform include New Jersey, Connecticut, and Washington, where average savings range from $120,000 to $173,000.
Gianluca Ferruggia, general manager at DesignRush, commented on the potential impact of the new tax plan on digital businesses:
“This proposed tax reform brings two things into focus for digital marketing agencies: opportunity and strategy.
For states like Delaware and Nebraska, the savings are a game-changer. Agencies in these states could use the extra cash to reinvest in hiring, technology, or even expanding into new markets. These states have always had a business-friendly edge, and this reform strengthens that position.”
Surprisingly, the analysis shows that 7 out of the 10 states benefiting most from the reform are Democrat-led, despite the tax proposal being driven by Republicans, highlighting how the impact of federal policy often transcends partisan lines.
Digital marketing agencies in these states can now go ahead and invest in the scaling and growth strategies they've been postponing due to budget constraints.
On the flip side, those who plan to start their digital businesses can choose the best location that will allow greater savings and maximum revenue in the long run.
The State-by-State Breakdown
Although there will be a 6% difference when the proposed corporate tax reform is enacted, the percentages differ based on how much tax a state starts with.
1. Delaware
- Tax Benefit: 8.44%
- Average Annual Savings: $76,786
Delaware’s robust business-friendly environment amplifies the effects of the federal tax cut, providing significant relief for its digital marketing agencies. Businesses here can more actively implement their growth investments.
2. Nebraska
- Tax Benefit: 7.36%
- Average Annual Savings: $220,081
While Nebraska’s tax benefit percentage is slightly lower, its higher starting tax burden leads to the largest dollar savings. Agencies in the state need to take advantage of this to ensure their business stays relevant in the long term.
3. New Jersey
- Tax Benefit: 7.01%
- Average Annual Savings: $120,985
The business landscape in New Jersey has always been dense with competition, making it a prime location to leverage the financial boost from the reform. Digital marketing agencies can now allocate these savings toward more competitive strategies like retaining top performers or enhancing client offerings.
4. Connecticut
- Tax Benefit: 6.98%
- Average Annual Savings: $121,312
Known for its competitive digital sector, Connecticut could see agencies double down on offering better packages to tech experts and investing in innovation, like AI-driven marketing solutions.
5. Washington
- Tax Benefit: 6.85%
- Average Annual Savings: $173,402
The Pacific Northwest remains a digital marketing hub, with Washington’s agencies well-positioned to capitalize on the reform’s benefits with investments in tech-driven initiatives like programmatic advertising or advanced CRM systems.
While Nebraska’s tax benefit percentage is slightly lower, its higher starting tax burden leads to the largest dollar savings. Agencies in the state need to take advantage of this to ensure their business stays relevant in the long term.
Nebraska pays $3,210,027 at 21% and would pay $2,989,946 at 15%, saving $220,081, which is 7.36% of its original tax burden. Despite Nebraska saving more overall, Delaware sees a bigger percentage reduction because it has a smaller starting tax burden.
Tax Benefits by the Numbers
| Rank | State | (21%) Current Tax Burden (2024) | (15%)Potential Tax Burden (2025) | Savings ($) | Tax Benefit (%) |
| 1 | Delaware | $986,919 | $910,133 | $76,786 | 8.44% |
| 2 | Nebraska | $3,210,027 | $2,989,946 | $220,081 | 7.36% |
| 3 | New Jersey | $2,522,769 | $2,402,271 | $120,498 | 5.02% |
| 4 | Connecticut | $2,968,612 | $2,830,197 | $138,415 | 4.89% |
| 5 | Washington | $3,833,304 | $3,659,663 | $173,641 | 4.74% |
| 6 | Rhode Island | $3,105,158 | $2,966,435 | $138,723 | 4.68% |
| 7 | Georgia | $2,219,877 | $2,132,687 | $87,190 | 4.09% |
| 8 | Illinois | $1,930,505 | $1,858,707 | $71,798 | 3.86% |
| 9 | Oklahoma | $2,052,653 | $1,978,947 | $73,706 | 3.72% |
| 10 | Indiana | $3,405,298 | $3,292,949 | $112,349 | 3.41% |
| 11 | Minnesota | $3,914,329 | $3,790,594 | $123,735 | 3.26% |
| 12 | North Carolina | $1,897,128 | $1,838,371 | $58,757 | 3.20% |
| 13 | New York | $1,130,575 | $1,095,976 | $34,599 | 3.16% |
| 14 | Pennsylvania | $3,016,826 | $2,926,303 | $90,523 | 3.09% |
| 15 | Virginia | $1,946,696 | $1,888,439 | $58,257 | 3.08% |
| 16 | Arkansas | $3,605,029 | $3,505,595 | $99,434 | 2.84% |
| 17 | Missouri | $4,127,230 | $4,013,472 | $113,758 | 2.83% |
| 18 | California | $1,598,276 | $1,555,385 | $42,891 | 2.76% |
| 19 | Arizona | $1,994,859 | $1,943,028 | $51,831 | 2.67% |
| 20 | Texas | $2,100,130 | $2,045,912 | $54,218 | 2.65% |
| 21 | Massachusetts | $2,190,891 | $2,135,346 | $55,545 | 2.60% |
| 22 | Ohio | $3,503,354 | $3,417,674 | $85,680 | 2.51% |
| 23 | Kentucky | $3,438,331 | $3,355,052 | $83,279 | 2.48% |
| 24 | Wisconsin | $2,329,727 | $2,273,270 | $56,457 | 2.48% |
| 25 | Tennessee | $2,838,931 | $2,770,474 | $68,457 | 2.47% |
| 26 | Kansas | $2,335,598 | $2,282,424 | $53,174 | 2.33% |
| 27 | Maine | $1,538,167 | $1,504,599 | $33,568 | 2.23% |
| 28 | Michigan | $1,970,989 | $1,928,834 | $42,155 | 2.19% |
| 29 | Nevada | $1,166,664 | $1,143,353 | $23,311 | 2.04% |
| 30 | Mississippi | $1,528,994 | $1,498,502 | $30,492 | 2.03% |
| 31 | Florida | $1,084,938 | $1,064,634 | $20,304 | 1.91% |
| 32 | Idaho | $1,962,192 | $1,926,872 | $35,320 | 1.83% |
| 33 | Maryland | $1,256,023 | $1,234,118 | $21,905 | 1.77% |
| 34 | Vermont | $1,060,756 | $1,042,311 | $18,445 | 1.77% |
| 35 | Oregon | $2,014,287 | $1,979,370 | $34,917 | 1.76% |
| 36 | Alabama | $2,217,431 | $2,179,839 | $37,592 | 1.72% |
| 37 | Hawaii | $919,940 | $904,787 | $15,153 | 1.67% |
| 38 | North Dakota | $2,448,100 | $2,408,382 | $39,718 | 1.65% |
| 39 | Colorado | $2,175,792 | $2,140,744 | $35,048 | 1.64% |
| 40 | Louisiana | $2,068,691 | $2,035,991 | $32,700 | 1.61% |
| 41 | Utah | $2,102,281 | $2,070,035 | $32,246 | 1.56% |
| 42 | Iowa | $1,841,915 | $1,816,976 | $24,939 | 1.37% |
| 43 | South Carolina | $1,599,831 | $1,579,934 | $19,897 | 1.26% |
| 44 | South Dakota | $2,157,233 | $2,131,712 | $25,521 | 1.20% |
| 45 | West Virginia | $1,364,910 | $1,348,708 | $16,202 | 1.20% |
| 46 | Wyoming | $572,944 | $566,225 | $6,719 | 1.19% |
| 47 | New Hampshire | $1,578,347 | $1,564,589 | $13,758 | 0.88% |
| 48 | Montana | $1,004,732 | $997,007 | $7,725 | 0.77% |
| 49 | New Mexico | $1,548,739 | $1,537,914 | $10,825 | 0.70% |
| 50 | Alaska | $2,016,109 | $2,003,401 | $12,708 | 0.63% |
DesignRush Methodology
The study analyzed the potential impact of the proposed 2025 corporate tax reform on digital marketing businesses using four key metrics:
- Current Tax Burden: Estimated using corporate tax data from state-level reports and adjusted to reflect the proportion of digital marketing agencies within total businesses in each state.
- Potential Tax Burden: Recalculated by applying the proposed tax rate reduction from 21% to 15%.
- Savings in $: The dollar amount difference between the current and potential tax burdens.
- Tax Benefit (%): The percent difference between the potential and current tax burden, calculated using the formula: (new value - old value) / old value * 100.
The proposed tax reform is a game-changer for digital marketing, but the degree of impact depends on where you’re located.
Sources
- U.S. Census Bureau: State Business Tax Data
- Tax Foundation: Corporate Income Tax Rates in the U.S.
- National Federation of Independent Business (NFIB): Tax Reform Impact on Small Businesses
- DesignRush Agency Database: Digital Marketing Agency Distribution and Financial Profiles
The study is a clear sign that agencies need to evaluate their financial strategies now to position themselves for long-term success.
As Ferruggia aptly put it, “This reform is a wake-up call for agencies. It’s an opportunity to rethink where you operate and how you allocate resources. The businesses that adapt now will be the ones thriving in 2025 and beyond.”
