R.I. sixth-worst on 2016 business tax climate index

RHODE ISLAND RANKED 45th on the state business tax climate index. It has one of the worst business tax climates in the nation, according to the Tax Foundation. / COURTESY TAX FOUNDATION
RHODE ISLAND RANKED 45th on the state business tax climate index. It has one of the worst business tax climates in the nation, according to the Tax Foundation. / COURTESY TAX FOUNDATION

PROVIDENCE – Rhode Island ranks among the bottom 10 states for tax friendliness, coming in sixth-worst, according to the Tax Foundation’s State Business Tax Climate Index.
The Tax Foundation said that the absence of a major tax is shared by states in the top 10, while states in the bottom 10 “tend to have a number of afflictions in common: complex, non-neutral taxes with comparatively high rates.”
New Jersey was last among states at No. 50, for having “some of the highest property tax burdens in the country.” Vermont and Connecticut also ranked among the bottom 10, coming in at No. 46 and No. 44, respectively.
Rhode Island’s No. 45 rank is the third year in a row that the Ocean State has occupied that position in the ranking.
Wyoming placed first for tax friendliness as it has no corporate or individual income tax. Among the New England states, only New Hampshire – which does not have sales tax – cracked the top 10, ranking seventh.
The report analyzes how well-structured each state’s tax code is by looking at more than 100 tax variables in five different categories: corporate, individual income, sales, property and unemployment insurance taxes.

Rhode Island received its highest ranking in the subcategory of sales tax structure at No. 27. In corporate tax structure, it ranked No. 34; individual income tax structure, No. 38; property tax structure, No. 44; and unemployment insurance tax structure, No. 49.

Phasing out its “antiquated capital stock tax and reducing its corporate income tax rate from 9 to 7 percent” enabled Rhode Island to move to No. 34 from No. 43 on the corporate tax component of the index, the report said.
According to a press release from the Tax Foundation, the goal of the State Business Tax Climate Index is “to start a conversation between taxpayers and policymakers about how their states fare against the rest of the country.”
“Substantive state tax reform has gained a lot of momentum over the past few years,” Tax Foundation Policy Analyst Jared Walczak said in a statement. “The stagnation of our federal tax code means that policymakers are turning to state codes to boost their national and global competitiveness. The state codes are ripe for reform and it’s encouraging to see many states taking action.”
The Tax Foundation is an independent tax policy research organization.

No posts to display