2021 State Business Tax Climate Index By Jared Walczak Janelle Cammenga TAX FOUNDATION TAX FOUNDATION | 1
EXECUTIVE SUMMARY EXECUTIVE SUMMARY
The Tax Foundation’s State Business Tax Climate Index enables business leaders, government policymakers, and taxpayers to gauge how their states’ tax systems compare. While there are many ways to show how much is collected in taxes by state governments, the Index is designed to show how well states structure their tax systems and provides a road map for improvement.
The absence of a major tax is a common factor among many of the top 10 states. Property taxes and unemployment insurance taxes are levied in every state, but there are several states that do without one or more of the major taxes: the corporate income tax, the individual income tax, or the sales tax. Nevada, South Dakota, and Wyoming have no corporate or individual income tax (though Nevada imposes gross receipts taxes); Alaska has no individual income or state-level sales tax; Florida has no individual income tax; and New Hampshire and Montana have no sales tax.
The 10 best states in this year’s The 10 lowest-ranked, or worst, Index are: states in this year’s Index are: 1. Wyoming 41. Alabama 2. South Dakota 42. Louisiana 3. Alaska 43. Vermont 4. Florida 44. Maryland 5. Montana 45. Arkansas 6. New Hampshire 46. Minnesota 7. Nevada 47. Connecticut 8. Utah 48. New York 9. Indiana 49. California 10. North Carolina 50. New Jersey
2021 State Business Tax Climate Index
WA 16 VT NH 43 6 ME MT ND 29 5 17 OR 15 MN 46 ID SD WI NY 20 48 WY 2 25 MI 1 14 PA IA MA NE 40 27 NV OH 34 28 IL IN 7 UT 39 36 9 CA 8 CO WV RI 49 KS 22 VA 37 21 MO KY 26 35 12 19 CT NC 10 47 TN 18 AZ OK NM SC NJ 24 30 AR 23 45 33 50 MS AL GA 32 41 31 DE 13 AK TX 11 LA 3 42 MD 44 FL 4 DC HI ( 46) 38