Wyoming's State Taxes Best For Business

by Leroy Baker, Tax-News.com, New York

12 October 2007

The Tax Foundation's 2008 State Business Tax Climate Index has found that Wyoming has the most business friendly tax regime in the United States, while the business powerhouses of California and New York continue to fare particularly badly in terms of state tax competitiveness.

The index, released onWednesday by the non-partisan pressure group which campaigns for simplicity and transparency in the US tax system, measures how well a state's tax system encourages investment by maintaining a broad tax base and low rates. It ranks states based on the taxes that matter most to businesses and business investment: corporate tax, individual income tax, sales tax, unemployment tax and property tax. The states are scored on these taxes, and the scores are weighted based on the relative importance or impact of the tax to a business.

According to the index, the top ten states with the best business tax climate in 2008 are: Wyoming, South Dakota, Nevada, Alaska, Florida, Montana, New Hampshire, Texas, Delaware and Oregan.

Propping up the table was Rhode Island in 50th place. California, New York and New Jersey occupy 47th, 48th and 49th place on the index respectively. The remaining states in the bottom ten include (descending): Maine, Minnesota, Nebraska, Vermont, Iowa and Ohio.

"There's no question that states are competing with one another for companies, jobs, and people," announced study co-author Curtis Dubay. "Taxes matter to businesses, and the states with better business tax climates will reap the rewards."

"States need to constantly be on the lookout for ways to improve their business tax climate. If they're standing still, they're losing ground to states actively improving their climates," Dubay concluded.

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