Research Areas

State Business Tax Climate Index

Taxes matter to business. They affect location decisions, job creation and retention, international competitiveness, and the long-term health of a state’s economy. The Tax Foundation’s annual State Business Tax Climate Index was designed to measure the “tax-friendliness” to business of each state’s tax system. The most competitive tax systems are typically found in states that raise sufficient tax revenue with economically neutral and simple tax systems. The least competitive are typically found in states with complex, multi-rate corporate and individual tax codes; above-average sales tax rates that exempt few business-to-business transactions; high state tax collections; and few institutional restraints on the level of taxation or spending.

Additional questions about business tax climates? Contact us at (202) 464-6200.

Articles from the Tax Foundation