2013 Business Tax Climate Index: NYS ranks worst for doing business

By WKTV News

New York State is the worst state in the U.S. to do business in, according to The Tax Foundation's latest Business Tax Climate Index.

"The Tax Foundation's 2013 edition of the State Business Tax Climate Index enables business leaders, government policymakers, and taxpayers to gauge how their states' tax systems compare," the website for the study by Scott Drenkard and Joseph Henchman states.

According to report's interactive map, Wyoming ranks as the best state in order to do business, with Utah rounding out the Top Ten.

"The absence of a major tax is a dominant factor in vaulting many of these ten states to the top of the rankings. Property taxes and unemployment insurance taxes are levied in every state, but there are several states that do without one or more of the major taxes: the corporate tax, the individual income tax, or the sales tax. Wyoming, Nevada, and South Dakota have no corporate or individual income tax; Alaska has no individual income or state-level sales tax; Florida has no individual income tax; and New Hampshire and Montana have no sales tax," the report states. "The lesson is simple: a state that raises sufficient revenue without one of the major taxes will, all things being equal, have an advantage over those states that levy every tax in the state tax collector's arsenal."

However, it is the Empire State that is finding itself at the lowest wrung of the ladder, coming in 50th.

"Despite moderate corporate taxes, New York scores at the bottom this year by having the worst individual income tax, the sixth-worst unemployment insurance taxes, and the sixth-worst property taxes. The states in the bottom 10 suffer from the same afflictions: complex, non-neutral taxes with comparatively high rates," the report states. "Maine had the most sizable rank improvement this year, as a repeal of their alternative minimum tax and a change in treatment of net operating losses vaulted them from 37th to 30th best overall. Michigan made a sizable leap by replacing their cumbersome and distortionary gross receipts tax (the Michigan Business Tax) with a flat 6 percent corporate income tax that is largely free of special tax preferences. This improved their overall rank from 18th to 12th best, and their corporate ranking from 49th to 7th best."

For the full report and the interactive map, you can check out The Tax Foundation online.

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