NCPA - National Center for Policy Analysis

The State Business Tax Climate 2013

October 30, 2012

The Tax Foundation's 2013 edition of the State Business Tax Climate Index allows business leaders, government policymakers and taxpayers to gauge how their states' tax systems compare, say Scott Drenkard and Joseph Henchman of the Tax Foundation.

Although not weighted equally, there are five components that measure a state's business tax climate:

  • Individual Income Tax: 33.1 percent.
  • Sales Tax: 21.5 percent.
  • Corporate Tax: 20.1 percent.
  • Property Tax: 14.0 percent.
  • Unemployment Insurance Tax: 11.4 percent.

Based on these respective components, the nine highest ranking states in this year's index are:

  • Wyoming.
  • South Dakota.
  • Nevada.
  • Alaska.
  • Florida.
  • Washington.
  • New Hampshire.
  • Montana.
  • Texas.

The nine lowest ranked states are:

  • Maryland.
  • Wisconsin.
  • North Carolina.
  • Minnesota.
  • Rhode Island.
  • Vermont.
  • California.
  • New Jersey.
  • New York.

It is important to remember that even in our global economy, states' stiffest and most direct competition often comes from other states.

Source: Scott Drenkard and Joseph Henchman, "The State Business Tax Climate 2013," Tax Foundation, October 9, 2012.


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