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2020 State Business
Tax Climate Index
By Jared Walczak
TAX FOUNDATION
TAX FOUNDATION | 1
EXECUTIVE SUMMARYExecutive 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.
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
The 10 best states in this year’s
Index are:
1. Wyoming
2. South Dakota
3. Alaska
4. Florida
5. Montana
6. New Hampshire
7. Nevada
8. Oregon
9. Utah
10. Indiana
The 10 lowest-ranked, or worst,
states in this year’s Index are:
41. Louisiana
42. Iowa
43. Maryland
44. Vermont
45. Minnesota
46. Arkansas
47. Connecticut
48. California
49. New York
50. New Jersey
2020 State Business Tax Climate Index
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, 2019 (the beginning of Fiscal Year 2020).
Source: Tax Foundation.
10 Best Business Tax Climates
10 Worst Business Tax Climates
VA
#25
NC
#15
SC
#30
GA
#32
FL
#4
AL
#40
MS
#31
TN
#18
KY
#24
OH
#38
IN
#10
IL
#35
MO
#14
AR
#46
LA
#41
IA
#42
MN
#45
WI
#26
MI
#12
PA
#29
NY
#49
ME
#33
TX
#13
OK
#27
KS
#34
NE
#28
SD
#2
ND
#16
MT
#5
WY
#1
CO
#17
NM
#22
AZ
#20
UT
#9
NV
#7
ID
#21
OR
#8
WA
#19
CA
#48
AK
#3
HI
#37
WV
#23
NH
VT
MA
CT
RI
NJ
DE
MD
DC
#36
#39
#47
#50
#11
#43
(#47)
#6
#44
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