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The best and worst tax systems in the nation

The Tax Foundation’s State Business Tax Climate Index gauges how state tax systems compare. While there are many ways to show how much is collected in taxes by state governments, the Index is designed to show how well states structure their tax systems, and provides a roadmap for improvement. 

Top 10 best states

  • Wyoming
  • South Dakota
  • Alaska
  • Florida
  • Nevada
  • Montana
  • New Hampshire
  • Utah
  • Indiana
  • Oregon


Among the top 10, Indiana and Utah levy all of the major tax types, but do so with low rates on broad bases. For many other "best of" states, the absence of a major tax is common.

  • Several states--Wyoming, Nevada, and South Dakota--have no corporate or individual income tax (though Nevada imposes gross receipts taxes)
  • Alaska has no individual income or state-level sales tax
  • Florida has no individual income tax
  • New Hampshire, Montana, and Oregon have no sales tax

 

Bottom 10 worst states

  • Rhode Island
  • Louisiana
  • Maryland
  • Connecticut
  • Ohio
  • Minnesota
  • Vermont
  • California
  • New York
  • New Jersey
 

In common among the worst states is a propensity to have complex, nonneutral taxes with comparatively high rates. New Jersey has some of the highest property tax burdens in the country, levies both an inheritance tax and an estate tax, and maintains some of the worst-structured individual income taxes in the country.

Click to read more at The Tax Foundation.

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Judy Vorndran can be reached at jvorndran@taxops.com or 720.227.0093. Follow Judy on LinkedIn. Go to TaxOps SALT center for more state and local tax insights.

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