The purpose of the State Business Tax Climate Index is to start a conversation between taxpayers and policymakers, and to provide a snapshot of information for businesses to make informed decisions, said Jared Walczak, Tax Foundation policy analyst.
“Taxes are an important consideration for businesses making location or expansion decisions,” Walczak said. “Increasingly, elected officials and economic development offices are using their states’ index scores to promote business relocation because they recognize that a good score on the index is a valuable proxy for the state’s overall competitiveness.”
A competitive tax code provides a more fertile ecosystem for a business.
Although business owners take notice of this index, Walczak said that ultimately the report shows up in the “employment prospects and paychecks of everyday Tennesseans.”
This information affects everybody, he said.
The report measured each state’s code by analyzing more than 100 tax variables in five categories. The Tax Foundation provided the breakdown for Tennessee (1st is the best and 50th is the worst):
- Corporate tax structure: 18th
- Individual income tax structure: 8th
- Sales tax structure: 46th
- Property tax structure: 37th
- Unemployment insurance tax structure: 25th
The Tax Foundation said the following states have the most competitive tax codes: Wyoming (1), South Dakota (2), Alaska (3), Florida (4), Nevada (5), Montana (6), New Hampshire (7), Indiana (8), Utah (9) and Texas (10).
And these following states were ranked as the least competitive: New Jersey (50), New York (49), California (48), Minnesota (47), Vermont (46), Rhode Island (45), Connecticut (44), Wisconsin (43), Ohio and D.C. (42) and Maryland (41).