The Tax Foundation is the nation’s leading independent tax policy research organization. Since 1937, our principled research, insightful analysis, and engaged experts have informed smarter tax policy at the federal, state, and local levels.
2022 STATE BUSINESS
TAX CLIMATE INDEX
BY
JANELLE CAMMENGA
JARED WALCZAK
© 2021 Tax Foundation
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Washington, D.C. 20005
202.464.6200
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TAX FOUNDATION | 1
EXECUTIVE SUMMARY
EXECUTIVE SUMMARY
The Tax Foundation’s State Business Tax Climate Index enables business leaders,
government policymakers, and taxpayers to gauge how their states’ 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
road map for improvement.
The absence of a major tax is a common factor among many of the top 10 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: the corporate income tax, the
individual income tax, or the sales tax. Nevada, South Dakota, and Wyoming have no
corporate or individual income tax (though Nevada imposes gross receipts taxes); 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.
1. Wyoming
2. South Dakota
3. Alaska
4. Florida
5. Montana
6. New Hampshire
7. Nevada
8. Tennessee
9. Indiana
10. Utah
The 10 lowest-ranked, or worst,
states in this year’s Index are:
The 10 best states in this
year’s Index are:
Note: A rank of 1 is best, 50 is worst. D.C.’s score and rank
do not affect other states. The report shows tax systems
as of July 1, 2021 (the beginning of Fiscal Year 2022).
Source: Tax Foundation
TAX FOUNDATION
10 Worst Business Tax Climates
2022 State Business Tax Climate Index
10 Best Business Tax Climates
WA
#15
MT
#5
ID
#17
ND
#19
MN
#45
ME
#33
MI
#12
WI
#27
OR
#22
SD
#2
NH
#6
VT
#43
NY
#49
WY
#1
IA
#38
NE
#35
MA
#34
IL
#36
PA
#29
CT
#47
RI
#40
CA
#48
UT
#10
NV
#7
OH
#37
IN
#9
NJ
#50
CO
#20
WV
#21
MO
#13
KS
#24
DE
#16
MD
#46
VA
#25
KY
#18
DC
(#48)
AZ
#23
OK
#26
NM
#28
TN
#8
NC
#11
TX
#14
AR
#44
SC
#31