The Tax Foundation’s State Business Tax Climate Index provides an annual ranking of each state’s tax system and whether it is hindering new business development within its boundaries. The overall index is comprised of five specific indexes devoted to major features of a state’s tax system that influence business decisions or the economy in general: the corporate income tax, the individual income tax, the sales and gross receipts tax, the unemployment insurance tax, and the state’s fiscal balance.
The 10 states deemed to have the most business-friendly tax systems in 2004 were South Dakota, Florida, Alaska, Texas, New Hampshire, Nevada, Wyoming, Colorado, Washington, and Oregon.
The 10 states with the least hospitable tax systems in 2004 were Hawaii, New York, Minnesota, West Virginia, Rhode Island, Vermont, Kentucky, Arkansas, Maine, and Wisconsin.
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