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Tax Foundation Business Tax Climate Ranking

Source: Tax Foundation
Latest Data: 2021
Release Timing: November
Frequency: Annual

The Tax Foundation annually assesses the 'business-friendliness' of state tax systems. The Index is designed to show the efficiency of the tax structures for each state and is based on weighting five main tax factors:  individual income tax, sales tax, corporate Income tax, property tax, and unemployment insurance tax. A full description of their methodology is available in their final report, beginning on page 9.

According to the Tax Foundation:  “A rank of 1 is best, 50 is worst. Rankings do not average to the total. States without a tax rank equally as 1. D.C.’s score and rank do not affect other states."

With respect to discrepancies between earlier published rankings and those in the 2020 report, the Tax Foundation explains:  “This report includes 2014-2019 Index rankings that can be used for comparison with the 2020 rankings and scores. These can differ from previously published Index rankings and scores due to enactment of retroactive statutes, backcasting of the above methodological changes, and corrections to variables brought to our attention since the last report was published. The scores and rankings in this report are definitive."


Source: 2020 State Business Tax Climate Index