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:
- Wyoming
- Alaska
- South Dakota
- Florida
- Montana
- New Hampshire
- Oregon
- Utah
- Nevada
- 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:
- Vermont
- Ohio
- Minnesota
- Louisiana
- Iowa
- Arkansas
- Connecticut
- New York
- California
- 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.