Best and Worst States for Business Taxes

The Tax Foundation has released the newest edition of its State Business Tax Climate Index, which ranks from 1 (best) to 50 (worst) the tax systems of the 50 states. According to the press release, South Dakota comes out on top.

1 minute read

November 10, 2010, 8:00 AM PST

By Tim Halbur


The Tax Foundation states that the goal of the report is to "focus lawmakers' attention on the importance of good tax fundamentals: enacting low tax rates and granting as few deductions, exemptions and credits as possible."

As might be determined from the name and mission statement, The Tax Foundation sees higher taxes as a deterrent to a healthy business climate:

From the report: "American companies often function at a competitive disadvantage in the global economy. They pay one of the highest corporate tax rates of any of the industrialized countries. The top federal rate on corporate income is 35 percent, and states with punitive tax systems cause companies to be even less competitive globally."

Predictably, highly-populated states with a density of cities (California, New York) rank low and cities where land is not at a premium (Wyoming, Alaska) rank highly.

Tuesday, November 9, 2010 in The Tax Foundation

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Use Code 25for25 at checkout for 25% off an annual plan!

Redlining map of Oakland and Berkeley.

Rethinking Redlining

For decades we have blamed 100-year-old maps for the patterns of spatial racial inequity that persist in American cities today. An esteemed researcher says: we’ve got it all wrong.

May 15, 2025 - Alan Mallach

Logo for Planetizen Federal Action Tracker with black and white image of U.S. Capitol with water ripple overlay.

Planetizen Federal Action Tracker

A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

May 14, 2025 - Diana Ionescu

Front of Walmart store with sign.

Walmart Announces Nationwide EV Charging Network

The company plans to install electric car chargers at most of its stores by 2030.

May 7, 2025 - Inc.

Aerial view of Albuquerque, New Mexico at sunset.

New State Study Suggests Homelessness Far Undercounted in New Mexico

An analysis of hospital visit records provided a more accurate count than the annual point-in-time count used by most agencies.

1 hour ago - Source NM

Close-up on white bike helmet lying on pavement with blurred red bike on its side in background abd black car visible behind it.

Michigan Bills Would Stiffen Penalties for Deadly Crashes

Proposed state legislation would close a ‘legal gap’ that lets drivers who kill get away with few repercussions.

2 hours ago - Wood TV 8

Muni bus on red painted bus-only lane in downtown San Francisco, California.

Report: Bus Ridership Back to 86 Percent of Pre-Covid Levels

Transit ridership around the country was up by 85 percent in all modes in 2024.

3 hours ago - Mass Transit