Where are the best places in the country to do business from a tax perspective?
The Tax Foundation, an independent research group, recently posted its annual State Business Tax Climate Index for 2022. It is based on figures as of July 1, 2021. Although there are many ways to show how much is collected in taxes by state governments, the SBTCI is designed to show how well states structure their tax systems. The ten best states in this year’s SBTCI are as follows:
2. South Dakota
6. New Hampshire
The absence of a major tax is a common factor among many of the top ten states. Property taxes and unemployment insurance taxes are levied in every state, but there are several states that do without one or more of the major taxes. Nevada, South Dakota and Wyoming have no corporate or individual income tax; Alaska has no individual income or state-level sales tax; Florida and Tennessee have no individual income tax; and New Hampshire and Montana have no sales tax. The ten lowest-ranked, or worst, states in this year’s SBTCI are as follows:
49. New York
50. New Jersey
The states in the bottom ten tend to have a number of common problems: complex, nonneutral taxes with comparatively high rates.