(The Center Square) – Wyoming has the most favorable tax climate in the nation for businesses, according to a new ranking.
The Cowboy State ranks No. 1 on the Tax Foundation’s 2023 index of states based off their business tax climates.
The index “enables business leaders, government policymakers, and taxpayers to gauge how their states’ tax systems compare,” the think tank said. “While there are many ways to show how much is collected in taxes by state governments, the Index is designed to show how well states structure their tax systems and provides a road map for improvement.”
Wyoming’s high ranking is partly attributed to the state’s lack of an individual income tax and a corporate income tax.
“Wyoming has the enviable position of neither levying an individual or a corporate income tax and having competitive residential property taxes,” said Jared Walczak, the Tax Foundation’s vice president of state projects. “Of course, this is possible because of the state’s heavy reliance on severance taxes, something that is not available at least at that level to most states and that has been a source of volatility in the past, but the Index is measuring tax structure and it is hard to get the structure of your income taxes wrong if you do not have any income taxes.”
South Dakota, Alaska, Florida, and Montana round out the top five in this year’s index.
The bottom five or worst states this year are Maryland, Connecticut, California, New York, and New Jersey.