PROVIDENCE – Rhode Island ranked No. 41 in the nation in the 2018 State Business Tax Climate Index, a three-spot improvement from 2017 and fourth highest in New England, the Tax Foundation said in a report released Tuesday.
The rankings for business tax climate include weighted index scores for each state’s corporate taxes, individual taxes, sales taxes, property taxes and unemployment insurance taxes. The Tax Foundation ranks states with uncomplicated tax codes and lower rates higher than those with effectively higher and more complex codes.
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This year, Rhode Island ranked No. 30 for corporate taxes in the nation, one spot higher than in the 2017 rankings. The state also gained one place for property taxes from No. 44 to No. 43 in the nation in 2018.
Unemployment Insurance Taxes in Rhode Island rose 27 rankings to the No. 23 spot. According to the report, “substantial reductions in minimum rates across all unemployment insurance tax schedules resulted in a dramatic improvement in Rhode Island’s ranking on the unemployment insurance component of the Index.”
The state ranked No. 39 in the nation for individual taxes, holding steady from its 2017 rankings. Rhode Island also remained ranked No. 22 for sales taxes in the nation.
The state has been on a slow climb up the overall list. In 2011, it ranked No. 47 in the nation and has either improved or stayed the same each year since then.
Wyoming ranked No. 1 in the nation overall for the 2018 State Business Tax Climate Index, ranking No. 1 in the nation for both corporate taxes and personal income taxes.
In New England, New Hampshire topped the rankings at No. 7 in the nation, the only state in the region to break the top 10. New Hampshire also ranked No. 7 in the nation in the 2017 rankings.
Massachusetts ranked the second highest in the region at No. 22. The Bay State rose 3 places from the 2017 report, improving its sales tax rankings, its corporate tax standing and its individual tax ranking.
Maine ranked No. 3 in New England at No. 28 in the nation, an improvement of one spot from the 2017 rankings. However, every measured ranking in Maine remained the same year over year except for individual taxes, which declined one place to No. 26 in the nation.
Rhode Island ranked fourth in the region, followed by Connecticut at No. 44, which ranked No. 49 in the nation for property taxes. Connecticut fell one spot from the 2017 Tax Foundation rankings.
Vermont ranked the lowest in New England at No. 47. Vermont ranked in the bottom 10 states in the nation for individual taxes (No. 44) and property taxes (No.48) in the 2018 rankings. Last year, Vermont ranked No. 48 in the nation.
New Jersey ranked last in the nation for the Tax Foundation’s 2018 State Business Tax Climate Index, ranking in the bottom 10 in the nation for every metric in the study except for unemployment insurance taxes, for which the state ranked No. 36.
Chris Bergenheim is the PBN web editor.
