Fla. ranked No. 5 for best ‘business tax climate’

11/01/2014

Fla. ranked No. 5 for best ‘business tax climate’

WASHINGTON – Oct. 30, 2014 – The Tax Foundation says 45 U.S. states are worse for business than Fla. in a comparison of tax climates, while only four states are considered more competitive.

To create a state ranking, the Tax Foundation looks at five individual tax components. In one of those, individual income taxes, Florida logs the No. 1 spot as best in the nation.

Other Florida category rankings include corporate taxes (No. 14 in a state comparison), sales taxes (No. 12), unemployment insurance taxes (No. 3) and property taxes (No. 16).

The 10 most competitive states are: Wyoming (No. 1), South Dakota (No. 2), Nevada (No. 3), Alaska (No. 4), Florida (No. 5), Montana (No. 6), New Hampshire (No. 7), Indiana (No. 8), Utah (No. 9) and Texas (No. 10).

On the flipside, the 10 least competitive states are: New Jersey (No. 50), New York (No. 49), California (No. 48), Minnesota (No. 47), Vermont (No. 46), Rhode Island (No. 45), Ohio (No. 44), Wisconsin (No. 43), Connecticut (No. 42) and Iowa (No. 41).

The Tax Foundation report measures each state's code by analyzing over 100 tax variables in five different categories: corporate, individual income, sales, property and unemployment insurance taxes.

States are punished for overly complex, burdensome and economically harmful tax codes, but rewarded for transparent and neutral tax codes that do not distort business decisions. A state's ranking can rise or fall significantly based not just on its own actions, but on the changes or reforms made by other states.

The biggest change in this year's report occurred in North Carolina, which jumped from 44th to 16th place due to a fundamental overhaul of the state's tax code.

"The federal government is gridlocked, but state policymakers on both sides of the aisle are enacting truly fundamental reforms," says Tax Foundation Economist and Manager of State Projects Scott Drenkard. "States are doing their part and it's time that Washington steps up."

The Tax Foundation's full state-by-state report, the 2015 State Business Tax Climate Index, is available online.

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