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Ranking Summary

The State Business Tax Climate Index is a measure of how well states structure their tax systems. It enables policymakers, business leaders, and taxpayers to gauge how their states’ tax systems compare, and provides a roadmap for improvement.

Hover over a state in the map to see its rankings. Click a state or tax category to learn more!

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Overall and Component Tax Ranks

Expand Table
State
Overall Rank
Corporate Taxes
Individual Taxes
Sales Taxes
Property Taxes
Unemp. Insur. Taxes
AlabamaAL352222491211
AlaskaAK326153825
ArizonaAZ21131847615
ArkansasAR393930442232
CaliforniaCA483250411313
ColoradoCO181815391435
ConnecticutCT443137274919
DelawareDE1550341203
FloridaFL419129102
GeorgiaGA361042282338
HawaiiHI271431231627
IdahoID20252326346
IllinoisIL293616354542
IndianaIN923109410
IowaIA404833193934
KansasKS233819311912
KentuckyKY332729143647
LouisianaLA42402750304
MaineME28412684144
MarylandMD432046184224
MassachusettsMA223512124649
MichiganMI12814112148
MinnesotaMN464345252837
MississippiMS24112038355
MissouriMO165282477
MontanaMT612213920
NebraskaNE25282413409
NevadaNV533142845
New HampshireNH745924443
New JerseyNJ504248465036
New MexicoNM34243540116
New YorkNY49749434730
North CarolinaNC1131320326
North DakotaND30163634214
OhioOH45474730118
OklahomaOK3293836151
OregonOR10343241831
PennsylvaniaPA264417213350
Rhode IslandRI413039224323
South CarolinaSC371541322429
South DakotaSD211332539
TennesseeTN14218452922
TexasTX13496373726
UtahUT841117521
VermontVT473744164818
VirginiaVA31640103141
WashingtonWA17466482717
West VirginiaWV191725151728
WisconsinWI38294372640
WyomingWY11163433
District of ColumbiaDC472643344530
Expand to see full list of rankings.

Ranked Tax Categories

Read Full Methodology

Corporate Taxes

The corporate tax component measures impacts of states’ major taxes on business activities, both corporate income and gross receipts taxes.

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Individual Taxes

The individual income tax component of the Index measures the impact of state and local taxes that fall on pass-through businesses.

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Sales Taxes

The sales tax component measures the impact of both sales and excise taxes, particularly when they fall upon business inputs.

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Property Taxes

The property tax component measures impacts of real and personal property, inventory, estate, inheritance, and other wealth taxes.

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Unemployment Insurance Taxes

The unemployment insurance tax component measures the impact of state UI tax attributes, from schedules to charging methods, on businesses.

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Notable Ranking Changes

Arizona

Arizona improved six places on the Index’s corporate component as a multiyear phasedown concluded with a 4.9% corporate income tax rate.

California

California extended income but not sales tax hikes, though local sales tax increases dropped California in the Index’s sales tax component.

District of Columbia

Continued tax reform efforts in the District of Columbia, including a corporate rate cut, improved D.C. two places on the Index’s corporate component.

Illinois

Illinois hiked both individual (3.75 to 4.95%) and corporate (7.75 to 9.5%) income tax rates, dropping the state from 28th to 29th on the Index.

Kansas

Kansas addressed structural deficits with a new income tax bracket and a 5.2% top rate, slipping three places on the Index.

New Mexico

New Mexico’s continued phase-in of corporate income tax reductions improved the state one place on the Index’s corporate tax component.

North Carolina

North Carolina reduced the corporate rate to 3% and the individual rate to 5.499%, improving the state’s individual income component ranking.

Rhode Island

Rhode Island unemployment insurance tax reform drove their Index UI component rank from 50th to 23rd and improved them to 41st overall.

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