A state’s tax climate is a critical component in the site selection process. Below is the Tax Foundation’s State Business Tax Climate Index, which scores and ranks all states based on each major component of a state’s overall tax burden – corporate, individual income, sales, property, and unemployment insurance taxes. While each component is separately analyzed and ranked, the Tax Foundation also provides an overall state ranking.
The Tax Foundation’s 2024 State Business Tax Climate Index Rankings:
States ranked highly typically lack a prominent tax component. For example, Alaska and Florida do not charge personal income taxes, while Alaska, New Hampshire and Montana do not impose sales tax. Other highly ranked states may impose all major tax components, but they likely have much lower rates. Conversely, states rated at the bottom of the list tend to have higher tax rates and more complex tax bases.
States with the Most Significant Overall Ranking Improvements from 2023 to 2024:
States That Have Moved Up the Rankings Since 2014:
Corporate income tax reform improved rankings in North Carolina, Kentucky, and Iowa. Arizona enhanced its individual income tax regime, and Wisconsin ranked higher with property tax amendments and low sales and excise tax rates.