March 15, 2012

Tax Foundation Releases its 2012 State Business Tax Climate Index

The Tax Foundation recently released its 2012 State Business Tax Climate Index which shows Connecticut holding steady at 40th. The index ranks the competitiveness of state tax systems by comparing 118 different variables in five tax areas: business income, personal income, sales, unemployment insurance, and property taxes.
The 10 highest ranked states in this year’s index are:

1. Wyoming
2. South Dakota
3. Nevada
4. Alaska
5. Florida
6. New Hampshire
7. Washington
8. Montana
9. Texas
10. Utah

The lowest ranked are:

41. Iowa
42. Maryland
43. Wisconsin
44. North Carolina
45. Minnesota
46. Rhode Island
47. Vermont
48. California
49. New York
50. New Jersey

So how does Connecticut compare to its neighbors? The following table shows how New England states fared in the index. Not surprisingly, New Hampshire, which has no broad-based income or sales tax, ranks as the 6th most competitive business tax climate in the country. Massachusetts ranks a few spots above Connecticut at 37th. Vermont ranks the lowest, 47th, among the six states.

State
Overall Rank
Corporate Tax Index Rank
Personal Income Tax Index Rank
Sales Tax Index Rank
Unemployment Insurance Tax Index Rate
Property Tax Index Rank
New Hampshire
6
46
9
1
39
41
Massachusetts
24
34
15
17
49
47
Maine
37
47
30
10
40
38
Connecticut
40
25
31
30
32
50
Rhode Island
46
40
36
24
50
46
Vermont
47
41
47
14
19
43