Which States Are Best for Business?(And the Worst!)

Tax Foundation ^ | October 11, 2006 | staff

[kellynla]

The State Business Tax Climate Index ranks how “business friendly” the 50 state tax systems are, providing a roadmap for state lawmakers concerned with keeping their states tax competitive. Since 2003, significant changes in a state's ranking, such as New Mexico and Maryland, reflect positive and negative changes in their state's tax system. (Read the full report at http://www.taxfoundation.org/publications/show/78.html.)

Keeping a state competitive in today’s global market can be difficult, but there is one factor lawmakers have direct control over: the quality of state tax systems. The Index measures how well a state’s tax system encourages investment by maintaining a broad tax base and low rates.

“Labor and capital are more mobile than ever,” says Chris Atkins, staff attorney and co-author of the Index. “In the global competition for jobs, no state can afford to be saddled with a tax system that unduly punishes new business investment.”

Rankings The ten best states in the Tax Foundation’s 2007 State Business Tax Climate Index are as follows:

1. Wyoming 2. South Dakota 3. Alaska 4. Nevada 5. Florida 6. Texas 7. New Hampshire 8. Montana 9. Delaware 10. Oregon

The ten worst states in the Tax Foundation’s 2007 State Business Tax Climate Index are:

41. Minnesota 42. Maine 43. Iowa 44. Nebraska 45. California 46. Vermont 47. New York 48. New Jersey 49. Ohio 50. Rhode Island

[paratrooper82]

I have lived in Michigan all of my life. I am currently in the US Army 82nd ABN recouping from injuries. I can tell you, unless you give up all of your independent decision making ability to both the State, then the Feds, and then the 501 c (3) environmental extremist who will be on you like stink on sh-t, you will not have a chance in hell of making it.

Currently in my small town, they just passed a anti smoking ordinance that will add to the cost of doing business in Michigan by 100%. Example, the State allows a private business to use existing ventilation system, and decide where to place "no smoking area." The new ordinance makes the small business owner provide a nonsmoking business and requires the business owner build a separate smoking room, with a separate and independent ventilation system to be approved by the local health department. Failure to follow the law and you could be fined 500.00 dollars each violation, and each day of the violation is a separate violation. you do the math! That is at the local level. Georgia Pacific just pulled out with 210 jobs because they could handle the continued micro management of private business at the local level. Second Chance just went bankrupt here in Central Lake.

I wish you all the luck in the world, but, remember, this is a Union State also.

[newgeezer]

43. Iowa

Thanks, Governor Vil-tax!

It may get worse before it gets any better. Looks like we'll elect another Dem governor, and the Republicans could lose both houses of the state legislature.

[Atlas Sneezed]

I don't see how a state with 9% income tax can be considered "business friendly."

[Atlas Sneezed]

9% income tax. And worse if you are in Portland Metro.

[Zhangliqun]

One would think that having #46 Vermont and #7 New Hampshire side-by-side would have drained all the business out of Vermont long ago -

Maybe it pretty much did happen -- maybe 30 years ago they were #25 and #26.

[lormand]

"Perry because he favors more toll roads that already hit me in the pocket every time I drive to work."

Take another road, or take the access road. Nobody is forcing you to take a toll road.

"This year, I'll abstain in the governor section of the ballot."

Chalk one up for the RATs.

[brooklin]

When will that new health law take effect?

[lormand]

"We'll see where Texas stands after Perry's business tax goes into effect."

Bookmark this page, and view it a year, or 2 years from now. Then compare the "state" of the State with today.

I'm positive that Texas will be even greater, and all the people with Perry Derangement Syndrome can ask for forgiveness. I will be showing the malcontents the exit sign out of Texas.

[wjcsux]

Thank you for your service to our country. I pray that you make a full and complete recovery.
I wouldn't re-locate to any of the rust-belt states to save my life! I was stationed at Wright-Patterson AFB, Ohio in the mid 70's. This was the second time I had ever been east of the Mississippi my entire life. I saw how the unions and the state and local governments bled businesses dry.
I have heard several radio ads on our local Clear Channel affiliate advertising Michigan as a great state to do business. All you need to do is go to Detroit once. This would certainly change your mind.
Does DeVos have much of a chance of being elected?

[Amerigomag]

wonder what it was ranked when Arnold took over as governor?

Above the worst ten category

On the other end of the spectrum, the ten tax systems least hospitable to business in 2004 are found in Hawaii, New York, Minnesota, West Virginia, Rhode Island, Vermont, Kentucky, Arkansas, Maine and Wisconsin.

No surprise. Downhill since the Austrian took office. Liberals do not nurture hospitable tax environments for business.

Under the Austrian, Californian's suffer the highest, per capita ,tax burden in the golden state's history.

[paratrooper82]

Thank you, it is my pleasure to serve my Country. DeVoss does have a good chance, the last time I loked at the slanted polls they were 47% Granholm, 42% DeVoss, but there are 10% who claim to be undecided?

We keep hearing from the loony left that the Republican incumbents should be at 50% or more, or they will lose, because an incumbent needs to be over the 50% mark to win, but, we don't hear a peep out of the left about the fact that Granholm has never been over the 50% mark in this entire election, in fact DeVoss has been ahead in the polls until recently, when the pollsters started polling in Detroit only.

Detroit looks like Germany after WWII, and that is not a misrepresentation either. In the 70's there was so much traffic coming into Detroit you had to start at least an hour early to make it to work on time. Today, in the A.M. all of the traffic is leaving Detroit, and there is NO tax base in Detroit anymore, and so the liberals are using redistribution of wealth to keep the dead Detroit City alive, and for that reason, many of us who live here in Northern Michigan cannot afford to own our land. Property taxes are going up and up and up. Granholm has increased every fee she could, and now I will have to go and buy a license plate, instead of the normal little tag, at about 60 dollars. She is an expert at raising fees instead of taxes, and then claim she has balanced the States budget without raising taxes, which is just a bunch of crap!

Anyway, I had better stop now, before I say something I might regret later about Granholm. NOT!

[Jaysun]

I'm surprised that Alabama didn't make the top 10

[Miztiki]

This year, I'll abstain in the governor section of the ballot.

Please reconsider. Don't think of it as a vote for Perry. Think of it as a vote against the others. Bring a clothes pin along if you have to. :-)

[Miztiki]

I was born and raised in (west) Michigan and absolutely love the state (water, woods, wildlife, etc.). I can't stand the politics or most of the people though. It's a shame because I would love to live there again someday. I still go visit my family every year but I can't see me moving back. It's too blue for me.

[wjcsux]

From what I understand, Detroit has been on life support for years.

[GSlob]

I doubt it - NH has had a pretty serious libertarian streak to it [low taxes and not too generous social services]. That's how it has always been. Thus I would suspect that its place near the top is a more or less a permanent fixture.

[LibertarianInExile]

"Take another road, or take the access road. Nobody is forcing you to take a toll road."

As true as it is that passenger cars won't have to take a toll road, every semi truck will. That will mean the money they pay in gas taxes and permits will be added to by the amount of tolls. It's not a tax--but it's going to have that impact on the people Texas DOES force to take TTC, and the folks they supply.

[Bat_Chemist]

That's because we all hate NC's state income tax morass. Circular reasoning is more logical!

[q_an_a]

7 out of 10 of these states - don't have enough jobs to matter. what makes a good state like Texas is that we only have a legislature every two years, this keeps out of our life a RINO or any other power hungry politican.

[Alice au Wonderland]

Thanks!