A tool that assesses tax structures across states doesn’t put Wisconsin, Minnesota, or Iowa in the best states and goes on to list Minnesota in the worst list. The State of Business Tax Climate Index that is produced by the nonprofit Tax Foundation looks at major tax components.
As the organization’s writer Jared Walczak states, the report isn’t going to send a business packing to one of the best states. What it does is show how “tax structure does play a role in a state’s economic successes or failures, and often a substantial one. Every state can benefit from a simple, neutral, transparent, pro-growth tax structure.
Tax areas it looks at:
- Corporate
- Individual income
- Sales & excise
- Property & wealth
- Unemployment insurance
In short, if any state forgoes any of the above taxes, it ranks high – like Nevada, Wyoming, and South Dakota that do not have corporate or individual income taxes. States that remove a tax, Walczak states, “Have to lean heavily on other major tax types, choose to operate on leaner budgets, take advantage of natural resources like oil and gas, or have demographics (like Florida) where other taxes can generate a surprising amount of revenue.
As you get farther into the list, you see more moderate rates.
