Budget Watch - Florida's Business Tax Climate Judged to be the Nation's 5th Best
A new report by the Tax Foundation evaluates the tax structures of the 50 states and compares them relative to their effect on each state’s business climate. The 2015 Business Tax Climate Index looks at five major tax areas: corporate income taxes, personal income taxes, sales taxes, property taxes and unemployment insurance taxes. The Index evaluates more than 100 variables in these areas to develop scores for each state ranging from 0 (worst) to 10 (best).
Instead of simply comparing how much in taxes each state collects, the report gauges how states structure their tax systems. Generally, the Index favors states that have simple tax structures with low rates and broad bases.
The five tax categories are weighted differently (see chart below). The more variation between state scores, the greater the weight of that category. The report points to evidence that shows that states with the best tax systems will be the most competitive in attracting business investment and fostering economic growth. The report offers the findings to provide a roadmap for improving these tax systems.
Florida fares well in the Index, receiving a score of 6.91, which is the 5th best in the nation. Wyoming is the highest-ranked state with a score of 7.58. The lowest score belongs to New Jersey at 3.43. The other states in the top five are South Dakota, Nevada, and Alaska.