Oct
23
The Top 10 Tax Friendly States for Business
As most business owners know, some states are more tax friendly than others.
The states that rank among the worst are the obvious ones such as New York, New Jersey, and California. But what about the best? The tax foundation rated the 10 best states for business owners. The states were ranked on several criteria, including taxes collected per capita, unemployment rate, corporate taxes collected, and sales tax rate.
10. Indiana – The tax foundation rated Indiana’s business tax climate as one of the best in the U.S. after it recently-lowered corporate income tax rate. This state is also known for it’s low income tax rates for individuals.
- Taxes collected per capita: $2,292 (22nd lowest)
- Unemployment: 8.1% (13th highest)
- Corporate taxes collected per capita: $110 (24th lowest)
- Sales tax rate: 7.00% (tied-2nd highest)
9. Utah – this state has several natural resources that are lucrative.The major industries of this state are mining, natural gas, copper, cattle ranching, and their beautiful natural parks which attract tourist throughout the year.
- Taxes collected per capita: $1,958 (13th lowest)
- Unemployment: 4.7% (7th lowest)
- Corporate taxes collected per capita: $89 (19th lowest)
- Sales tax rate: 5.95% (25th lowest)
8. New Hampshire – the state has a high corporate tax burden (8.5%), however the state does not have a sales tax. New Hampshire has a high percentage of timberland, meaning logging and paper industries are popular. Per capita collections in New Hampshire were among the highest in the nation, both in dollar terms and as a percent of income.
- Taxes collected per capita: $1,761 (8th lowest)
- Unemployment: 5% (9th lowest)
- Corporate taxes collected per capita: $443 (2nd highest)
- Sales tax rate: 0.00% (tied-the lowest)
7. Montana – offers taxpayers low individual income tax rates, a relatively low corporate income tax rate and no sales tax. Great for business owners!
- Taxes collected per capita: $2,316 (23rd lowest)
- Unemployment: 5.3% (tied-11th lowest)
- Corporate taxes collected per capita: $125 (21st highest)
- Sales tax rate: 0.00% (tied-the lowest)
6. Washington – one of the 7 states with no individual income tax. This helped it’s score improve. But, 24wallst.com says, “ The sales tax, which totals 8.9% when adding in the average local rate, is among the highest in the nation…The state is also one of just four with a gross receipts tax, under which revenues from corporate transactions are charged.”
- Taxes collected per capita: $2,566 (19th highest)
- Unemployment: 7.0% (tied-22nd lowest)
- Corporate taxes collected per capita: $0 (tied-the least)
- Sales tax rate: 6.50% (tied-9th highest)
5. Florida – another state that has no individual income tax, and corporate taxes are modest. The state’s corporate income tax rate is a flat 5.5% and according to www.wikipedia.com, is one of the lower rates in the nation. Florida relies on local and property tax a lot more than any other states.
- Taxes collected per capita: $1,718 (7th lowest)
- Unemployment: 7.0% (tied-22nd lowest)
- Corporate taxes collected per capita: $99 (21st lowest)
- Sales tax rate: 6.00% (tied-16th highest)
4. Alaska – has no individual income tax, which is great for residents. According to 24wallst.com, “The state actually gives each resident an annual payment, which is based on the investment earnings from the state’s energy royalties.” The state also has no sales tax but, instead has several different corporate income tax brackets businesses must follow.
- Taxes collected per capita: $7,708 (the highest)
- Unemployment: 6.5% (18th lowest)
- Corporate taxes collected per capita: $1,003 (the highest)
- Sales tax rate: 0.00% (tied-the lowest)
3. Nevada – Like several of the other states that are the most tax-friendly for business, Nevada has no individual income tax on earnings, dividends or interest. It is also one of just three states that have no corporate income or gross receipts tax. The state does have casinos, which are a nearly as lucrative as oil and gas drilling. In 2011, the state made $865 million just in taxes on gambling from casinos, roughly 5% of the state’s total revenue and far more than any other state. The state’s ability to raise revenue from gambling was threatened during the housing crisis and recession, during which the state’s budget deficit reached more than 54% of spending. (www.24wallst.com).
- Taxes collected per capita: $2,333 (25th lowest)
- Unemployment: 9.5% (the highest)
- Corporate taxes collected per capita: $0 (tied-the least)
- Sales tax rate: 6.85% (4th highest)
2. South Dakota – has no individual income tax or corporate income tax. It does, however, levy a franchise tax on financial institutions…it changed its banking and tax laws to attract credit-card operations, with companies like citigroup having a strong presence there. The state’s economy gets a boost from Federal government spending.
- Taxes collected per capita: $1,682 (3rd lowest)
- Unemployment: 3.8% (2nd lowest)
- Corporate taxes collected per capita: $19 (5th least)
- Sales tax rate: 4.00% (tied-7th lowest)
1. Wyoming – has had the best tax climate in the nation. The state charges no individual income tax, and it tied equally with 6 other states for great individual income tax policy. Additionally, the state is one of just three, alongside Nevada and South Dakota, with no corporate income tax or a gross receipts tax. Oil, gas, coal and other minerals provide much of the state’s total provided close to $1 billion a year in severance tax revenue, charged when nonrenewable resources are extracted, to the state as of 2011. (24wallst.com)
- Taxes collected per capita: $4,347 (3rd highest)
- Unemployment: 4.6% (tied-5th lowest)
- Corporate taxes collected per capita: $0 (tied-the least)
- Sales tax rate: 4.00% (tied-7th lowest)
*Provided by 24wallst.com
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