The states with the best tax environments are Wyoming, South Dakota, Alaska, Florida and Nevada, according to an in-depth analysis by the Tax Foundation.
The Foundation compiles a State Business Tax Climate Index (SBTCI) to help business executives, policymakers and the media gauge how each state’s tax system compares with other states, and ranks the 50 states according to the best and worst tax climates.
Wyoming and South Dakota, No. 1 and No. 2 respectively, have no corporate income tax and no individual income tax.
Alaska has no individual income tax or sales tax.
Florida has no individual income tax, and Nevada has no corporate income tax.
New York has the worst tax climate, according to SBTCI researchers, followed by New Jersey, Rhode Island, Ohio and Vermont.
New York has the worst individual income tax and a high unemployment insurance tax rate.
New Jersey has the worst business income tax and a high individual income tax, while Rhode Island has a high unemployment insurance tax and Ohio and Vermont have high individual income taxes.
"In a highly competitive global market, states need to make their tax systems friendly to business in order to facilitate the expansion and growth of business,” Foundation researchers say.
"A simple tax system that is fair to all businesses is the best way for states to have a competitive business tax climate.”
