Top 10 Business Tax Friendly States in the U.S.
NEW YORK (MainStreet) Wyoming is on a winning streak. It has the most favorable business tax environment in the nation for the third year in a row, according to the nonpartisan Tax Foundation's newly released State Business Tax Climate Index. Florida and Indiana are runners-up, ranking among the 10 most favorable states for taxes on business. Meanwhile, companies in New York, New Jersey, and California wrestle with the worst tax codes in the country
Texas took a turn south, dropping out of the top 10 for the first time in the report's history, landing at No. 11. Gaining favor were Arizona, which climbed to No. 22 and Kansas, which moved up six points to No. 20.
"The states that lost ground this year usually did so because they changed policy in a way that makes the tax code more complex, burdensome or economically harmful," Tax Foundation economist Scott Drenkard says. "By contrast, the states that improved did so because they are moved closer to a tax code that collects revenue without unnecessarily distorting business decisions. Their tax codes became more neutral."
The report analyzes more than 100 tax regulations for each state and issues a score. That score is used to determine a state's ranking.
According to the report, the top 10 business tax-friendly states for next year are Wyoming (No. 1), South Dakota (No. 2), Nevada (No. 3), Alaska (No. 4), Florida (No. 5), Washington (No. 6), Montana (No. 7), New Hampshire (No. 8), Utah (No. 9) and Indiana (No. 10).
The 10 lowest-ranked states are Maryland (No. 41), Connecticut (No. 42), Wisconsin (No. 43), North Carolina (No. 44), Vermont (No. 45), Rhode Island (No. 46), Minnesota (No. 47), California (No. 48), New Jersey (No. 49), and New York (No. 50).
"The goal of the State Business Tax Climate Index is to start a conversation with policymakers about how their states fare against the rest of the country," Drenkard says. "With this report, we're asking: 'How well is your tax code structured? Are businesses in your state spending too much time complying with onerous tax provisions? Are you double taxing things you shouldn't?'"
By Hal M. Bundrick for MainStreet