There’s nothing uniform about taxes in the U.S. That’s because some states offer bigger tax breaks to attract commercial taxpayers than others do.
In a new report, the non-profit Tax Foundation looks at how those differences impact the business environment in each state.
"Taxation is inevitable, but the specifics of a state’s tax structure matter greatly," the report says. "The measure of total taxes paid is relevant, but other elements of a state tax system can also enhance or harm the competitiveness of a state’s business environment."
The Tax Foundation’s State Business Tax Climate Index used 124 variables to rank and score all 50 states based on individual income taxes, sales taxes, corporate income taxes, property taxes and unemployment insurance (U.I.) taxes. Each state’s overall business tax climate was then scored on a scale of 0 (worst) to 10 (best) to rank each one.
Here, in ascending order, are the Tax Foundation's best states for business tax climate:
10. North Carolina
5.51
The state ranks 10th in U.I. taxes, 26th in property taxes, 22nd in sales tax, 16th in individual taxes and fourth in corporate taxes. Overall Score:
9. Indiana
5.58
Indiana ranks 27th in U.I. taxes, second in property taxes, 20th in sales taxes,15th in individual taxes and 12th in corporate taxes.
8. Utah
5.60
The state ranks 17th, seventh in property taxes, 23rd in sales taxes, 10th in individual taxes and 14th in corporate taxes.
7. Nevada
5.90
The state ranks 47th in U.I. taxes, fifth in property taxes, 44th in sales taxes, fifth in individual taxes and 25th in corporate taxes.
6. New Hampshire
6.05
New Hampshire ranks 44th in U.I. taxes, 47th in property taxes, first in sales taxes, ninth in individual taxes and 41st in corporate taxes.
5. Montana
6.07
Montana has no state sales tax and household goods are exempt from property taxes. Montana ranks 20th in U.I. taxes, 28th in property taxes, third in sales taxes, 25th in individual taxes and 21st in corporate taxes.
4. Florida
6.89
The Sunshine State does not levy a state income tax. Florida ranks second in U.I. taxes, 13th in property taxes, 21st in sales taxes, tied for first in individual taxes and sixth in corporate taxes. .
3. Alaska
7.28
Federal subsidies help keep taxes low in Alaska and there is no state sales tax. Alaska ranks 45th in U.I. taxes, 22nd in property taxes, fifth in sales taxes, tied for first in individual taxes and 26th in corporate taxes.
2. South Dakota
7.42
South Dakota is one of seven states that do not levy a state income tax. South Dakota ranks 42nd in U.I. taxes, 20th in property taxes, 33rd in sales taxes and tied for first in both individual and corporate taxes.
1. Wyoming
7.72
The Cowboy State does not levy a state income tax or assess a tax on retirement income. Wyoming ranks 29th in U.I. taxes, 39th in property taxes, sixth in sales taxes and tied for first in both individual and corporate taxes.
The full report can be viewed here.
