Best and Worst State Tax Climates

New Jersey no longer has the worst tax climate in the U.S. The worst 10 all have complex, non-neutral taxes with comparatively high rates; meanwhile, most of the 10 best have eliminated at least one big tax.

New Jersey no longer has the worst tax climate in the U.S., but it’s not because Gov. Chris Christie actually improve the state’s tax climate all that much. The only reason New Jersey moved up a spot is because another state dropped low enough to overtake the Garden State’s perennial spot at the bottom.

The new worst state for business taxes is New York. The state swapped placed with New Jersey because it has the worst individual income tax, the sixth-worst unemployment insurance taxes and the sixth-worst property taxes, according to The Tax Foundation.

All of the states in the bottom 10 have complex, non-neutral taxes with comparatively high rates, and they’ve all been in the bottom 10 for three years running now.

The majority of the top 10 states with the best tax climates do without one or more of the major taxes: corporate tax, individual income tax or sales tax. Wyoming, Nevada and South Dakota have no corporate or individual income taxes; Alaska has no individual income or state-level sales tax; Florida has no individual income tax; and New Hampshire and Montana have no sales tax.

The Tax Foundation factored in five components and weighted them differently: individual income tax (33.1%); sales tax (21.5%); corporate income tax (20.1%); property tax (14%); and unemployment insurance tax (11.4%).

States that ranked well in one tax could have done very poorly in another. For instance, Arizona was number one for unemployment insurance tax, but 50 for sales tax. Nevada ranked number one in the two most heavily weighted taxes, and poorly in two of the taxes that were given lesser weight.

Worst

41. Maryland

Annapolis

Corporate tax rank: 15

Individual income tax rank: 45

Sales tax rank: 8

Unemployment insurance tax rank: 46

Property tax rank: 40

42. Iowa

Corporate tax rank: 49

Individual income tax rank: 33

Sales tax rank: 24

Unemployment insurance tax rank: 34

Property tax rank: 37

43. Wisconsin

Corporate tax rank: 32

Individual income tax rank: 46

Sales tax rank: 15

Unemployment insurance tax rank: 23

Property tax rank: 33

44. North Carolina

Charlotte, N.C., skyline

Corporate tax rank: 29

Individual income tax rank: 43

Sales tax rank: 47

Unemployment insurance tax rank: 5

Property tax rank: 36

45. Minnesota

Corporate tax rank: 44

Individual income tax rank: 44

Sales tax rank: 35

Unemployment insurance tax rank: 40

Property tax rank: 26

46. Rhode Island

Providence

Corporate tax rank: 42

Individual income tax rank: 37

Sales tax rank: 25

Unemployment insurance tax rank: 50

Property tax rank: 46

47. Vermont

Corporate tax rank: 43

Individual income tax rank: 47

Sales tax rank: 14

Unemployment insurance tax rank: 22

Property tax rank: 48

48. California

Financial district in San Francisco

Corporate tax rank: 45

Individual income tax rank: 49

Sales tax rank: 40

Unemployment insurance tax rank: 16

Property tax rank: 17

49. New Jersey

Corporate tax rank: 40

Individual income tax rank: 48

Sales tax rank: 46

Unemployment insurance tax rank: 24

Property tax rank: 49

50. New York

Times Square in Manhattan. ©iStockphoto.com/Cristian Baitg

Corporate tax rank: 23

Individual income tax rank: 50

Sales tax rank: 38

Unemployment insurance tax rank: 45

Property tax rank: 45

Go to the next page to see the states with the best tax climates.

Best

10. Utah

Ogden, Utah

Corporate tax rank: 5

Individual income tax rank: 14

Sales tax rank: 22

Unemployment insurance tax rank: 20

Property tax rank: 3

9. Texas

Corporate tax rank: 38

Individual income tax rank: 7

Sales tax rank: 36

Unemployment insurance tax rank: 14

Property tax rank: 32

8. Montana

Corporate tax rank: 16

Individual income tax rank: 20

Sales tax rank: 3

Unemployment insurance tax rank: 21

Property tax rank: 7

7. New Hampshire

Eagle Square in Concord, N.H.

Corporate tax rank: 48

Individual income tax rank: 9

Sales tax rank: 1

Unemployment insurance tax rank: 42

Property tax rank: 43

6. Washington

Corporate tax rank: 30

Individual income tax rank: 1

Sales tax rank: 48

Unemployment insurance tax rank: 18

Property tax rank: 22

5. Florida

Art deco district in Miami

Corporate tax rank: 13

Individual income tax rank: 1

Sales tax rank: 18

Unemployment insurance tax rank: 10

Property tax rank: 25

4. Alaska

Corporate tax rank: 27

Individual income tax rank: 1

Sales tax rank: 5

Unemployment insurance tax rank: 28

Property tax rank: 13

3. Nevada

The Las Vegas Strip

Corporate tax rank: 1

Individual income tax rank: 1

Sales tax rank: 42

Unemployment insurance tax rank: 41

Property tax rank: 16

2. South Dakota

Downtown Sioux Falls

Corporate tax rank: 1

Individual income tax rank: 1

Sales tax rank: 33

Unemployment insurance tax rank: 35

Property tax rank: 20

1. Wyoming

Corporate tax rank: 1

Individual income tax rank: 1

Sales tax rank: 12

Unemployment insurance tax rank: 29

Property tax rank: 35

Read more:

Most and Least Business Friendly States

Most and Least Tax-Friendly State for Retirees

Tax Trends from the Recession

2013 State Business Tax Climate Index.- The Tax Foundation