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State’s Spot On Annual Tax Climate Index Falls

New York has fallen one spot in the Tax Foundation’s annual Tax Climate Index, now ranking ahead of only New Jersey in the national rankings.

The top 10 states are Wyoming, South Dakota, Alaska, Florida, Montana, New Hampshire, Nevada, Oregon, Utah an Indiana. The bottom 10 are Louisiana, Iowa, Maryland, Vermont, Minnesota, Arkansas, Connecticut, California, New York and New Jersey.

“The states in the bottom 10 tend to have a number of afflictions in common: complex, nonneutral taxes with comparatively high rates,” foundation officials wrote. “New Jersey, for example, is hampered by some of the highest property tax burdens in the country, has the second highest-rate corporate income tax in the country and a particularly aggressive treatment of international income, levies an inheritance tax, and maintains some of the nation’s worst-structured individual income taxes.”

New York ranked 13th in the nation in corporate taxes, an improvement of four spots from the 2018 rankings. The state ranked in the middle of the pack or worse in the remaining categories — individual taxes (48th), sales taxes (43rd), property taxes (46th) and unemployment insurance taxes (38th). For comparison, Pennsylvania ranked 29th overall in the Tax Foundation rankings. Pennsylvania has higher corporate tax rates, ranking 46th in the country and higher unemployment insurance taxes, ranking 42nd in the country. Pennsylvania performs much better than New York when it comes to individual taxes (19th), sales taxes (17th) and property taxes (21st).

“New York again ranking near the bottom nationally in terms of its business tax burden is the latest reminder that much work remains to make the Empire State more competitive and affordable for small businesses,” said Greg Biryla, National Federation of Independent Business New York state director.

“Making the property tax cap permanent last year was an essential step to control the long-term growth of local property taxes, but continued action is clearly needed. New York should prioritize tax relief for small businesses on Main Street, which are most likely to reinvest in their growth, workforce, and communities.”

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