The Index, now in its 11th edition, measures how well structured each state’s code is by analyzing more than 100 tax variables in five different categories: corporate, individual income, sales, property, and unemployment insurance taxes. States are punished for overly complex, burdensome, and economically harmful tax codes but are rewarded for transparent and neutral tax codes that do not distort business decisions. A state’s ranking can rise or fall significantly not only because of its own actions, but also because of changes or reforms made in other states.
The breakdown of Indiana’s ranking this year is as follows (first is best, 50th is worst):
Indiana’s overall State Business Tax Climate ranking: eighth
Corporate tax structure: 22nd
Individual income tax structure: 10th
Sales tax structure: 10th
Property tax structure: fifth
Unemployment insurance tax structure: seventh
“The federal government is gridlocked, but state policymakers on both sides of the aisle are enacting truly fundamental reforms,” said Tax Foundation Economist and Manager of State Projects Scott Drenkard. “States are doing their part and it’s time that Washington steps up.”
The report’s key findings note the 10 most competitive states are Wyoming, South Dakota, Nevada, Alaska, Florida, Montana, New Hampshire, Indiana, Utah and Texas.
The 10 least competitive states are: New Jersey, New York, California, Minnesota, Vermont, Rhode Island, Ohio, Wisconsin, Connecticut, and Iowa.