The Tax Foundation, a non-profit organization, is dedicated to educate taxpayers about sound tax policy and the size of tax burdens borne by Americans at all levels of government. Each year they complete a comparative ‘tax friendliness’ to business for each state. The 2012 State Business Tax Index can be viewed and downloaded for the complete 56 page report.
In calculating the State Business Tax Climate Index, the Tax Foundation takes into consideration corporate taxes, individual income taxes, sales taxes, unemployment insurance tax and property taxes. Each respective tax is not weighted equally as some taxes are not as onerous as others. Weights (supporting logic as to why are in the report) are as follows:
|33.1 Percent||Individual Income Tax|
|21.4 Percent||Sales Tax|
|20.3 Percent||Corporate Income Tax|
|14.1 Percent||Property Tax|
|11.1 Percent||Unemployment Insurance Tax|
The 10 best states in the 2012 State Business Tax Index Include:
- South Dakota
- New Hampshire
It is surprising how quickly states can change rank as in 2011, Texas, for example, ranked 13th best and Washington was 11th. Illinois, which was ranked 16th best in 2011, could muster just 28th best in 2012—obviously a state pressed for revenues.
The 10 worst State Business Tax Environments include:
- New Jersey
- New York
- Rhode Island
- North Carolina
The Tax Foundation also does a significant amount of other tax-related research.
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