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2019 State Business Tax Climate Rankings

The tax climate for businesses varies dramatically depending on where your business is located. State business environments are constantly shifting; some states readily enact changes made at the federal level, while others do not.

Each year the non-profit Tax Foundation organization announces a ranking of tax burdens for businesses. The results of its 2019 ranking are noted here:

State Rank State Rank
Alabama 39 Montana 5
Alaska 2 Nebraska 24
Arizona 27 Nevada 9
Arkansas 46 New Hampshire 6
California 49 New Jersey 50
Colorado 18 New Mexico 25
Connecticut 47 New York 48
Delaware 11 North Carolina 12
Florida 4 North Dakota 17
Georgia 33 Ohio 42
Hawaii 38 Oklahoma 26
Idaho 21 Oregon 7
Illinois 36 Pennsylvania 34
Indiana 10 Rhode Island 37
Iowa 45 South Carolina 35
Kansas 28 South Dakota 3
Kentucky 23 Tennessee 16
Louisiana 44 Texas 15
Maine 30 Utah 8
Maryland 40 Vermont 41
Massachusetts 29 Virginia 22
Michigan 13 Washington 20
Minnesota 43 West Virginia 19
Mississippi 31 Wisconsin 32
Missouri 14 Wyoming 1

Note: A rank of 1 is best, 50 is worst. Rankings to not average to the total. States without a tax rank equally as 1. D.C.’s score and rank do not affect other states. The report shows tax systems as of July 1, 2018 (the beginning of the Fiscal Year 2019).

Source: Tax Foundation – https://taxfoundation.org/state-business-tax-climate-index-2019/

The 10 best business tax states in this year’s index are:

  1. Wyoming
  2. Alaska
  3. South Dakota
  4. Florida
  5. Montana
  6. New Hampshire
  7. Oregon
  8. Utah
  9. Nevada
  10. Indiana

Most of the above states are favorable for businesses because they lack one of the common tax revenue sources. Some states lack corporate taxes while others have no sales tax or individual income taxes. Indiana is unique in that it has all the major tax classifications but at lower rates than most other states.

The 10 worst business tax states in this year’s index are:

  1. Vermont
  2. Ohio
  3. Minnesota
  4. Louisiana
  5. Iowa
  6. Arkansas
  7. Connecticut
  8. New York
  9. California
  10. New Jersey

The common themes within these non-friendly business tax states are high tax rates with complex tax codes. Iowa and Arkansas dropped into the bottom 10 replacing Rhode Island and Maryland this year.

Want to learn more? The full study is available at www.taxfoundation.org.

 

 

As always, should you have any questions or concerns regarding your tax situation please feel free to call.

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