The USA is not officially an offshore jurisdiction; this regulation applies to all states. Therefore, it will not be possible to register a company with zero taxation, but the founder can choose a region with the most favorable rates. The country's code regulating the size of quotas and the procedure for their collection consists of more than 11,000 pages. About 4% of data changes every year. To get up-to-date information, you should not only read the article, but also dial our expert for a detailed consultation.
- Private individuals must give the state an amount of 10-35%.
- Law firms are subject to duty at a rate of 15-35%.
- VAT level - 7,25-8,25%.
Any tax rate in the United States is formed from three types of duties: Federal, local and state fees. The fixed rate exists only for the first type, as it is set by the state.
What taxes exist in California?
Federal fees
Paid by local and foreign companies from the net profit of the enterprise for the reporting period. To calculate the exact size progressive rate and the final financial equivalent, the table below is used:
State duty
The state has given local municipal authorities almost complete freedom in regulating business. Most of the US tax code consists only of regulations for federal fees and covers mass public enterprises. The main legislation for the management of small and medium-sized organizations differs significantly from one state to another.
This fact has led to the fact that lawyers and accountants cannot obtain a federal license to practice and work within the same region. California has a single fixed fee for all types of organizations. Its size is 8,84%, but not less than $800 per year.
Local deductions
Charged from a specific office or representative office located in a specific city. Most counties have waived taxes, some have set average amounts about 150 dollars in year. You should only specify the specific percentage or amount of payment in financial equivalent at those addresses in California where you have business offices. If the representative office is simply registered at a legal address, but conducts business online or at another address, payment of a fee is not required.
In the stated state, the local fee is from 7.25 to 9.75%. This can represent a large amount of money per year for a large enterprise. State legislation provides for criminal liability for concealing tax in an amount exceeding 50 thousand dollars. Consult a UraFinance expert in advance and don’t worry about your future!
Personal income tax in California
Payment will be charged from all individuals. In this case, the States do not make a distinction between locals and foreigners. This type of tax is federal, but the system for calculating deductions is very complicated for CIS citizens. The income quota differs depending on marital status payer. For married couples, the rate may be different for filing jointly and separately. The duty amount is calculated on a progressive scale:
When spouses file a joint return, the fee increases due to the combination of income. In addition to this mandatory contribution to the federal treasury, there is a necessary social fee. Its size depends on the position of the counterparty in society. For workers employed in the office, store, market and others, one percent applies. For self-employed payers, a different one is provided.
- For employed citizens, it is possible to divide payments together with the employer, which reduces the total amount.
- Individuals who are analogues of individual entrepreneurs pay the entire fee themselves.
In the two listed cases, the standard rate is 10.4%. Additionally, transfers are made to medical fund at a rate of 2.9%. They go to care for socially vulnerable groups of citizens. Both requisitions are transferred to the state treasury. The state also has local tax at the rate of 9,3%, which is the highest in the country.
Additional charges
- VAT in California . Applies to all product groups. The quota size is constantly changing due to constant regulation by local governments. The standard set by the state authorities is 7.25%, but in some cities it is higher. For example, the regional capital of Sacramento recorded a sales tax of 8.25% on goods and services.
- Property tax in California. Belongs to the category of local fees. For this state is 1.25% of the liquid value of the object. Collected from the owners annually in two equal payments. It applies to all segments of the population, including foreign residents.
- Tax on iPhone in California. The most famous Apple product is often ordered by residents of other countries so as not to wait for release in their countries. In view of this trend, local authorities have introduced a running fee. Its level is 9.75%.
Our lawyers are always happy to inform you of the most current tax rates in US states. Call for a free consultation or schedule an appointment in the office.
tax america economic legislative
The United States of America consists of 50 states, each of which has its own budget. State authorities pursue an independent fiscal policy and have the right to independently introduce taxes and fees on their territory. Own revenues account for approximately 80% of budget revenues, and the remaining 20% are federal subsidies (grants).
The first place in state budget revenues is occupied by sales tax, the share of which exceeds 40% of revenues. It is paid by consumers when purchasing various goods. Tax rates vary significantly by state. Among the states where this tax does not exist are Alaska, Delaware, and New Jersey. In the rest, the rate fluctuates, as it is set by the state governments themselves. It is lowest in Colorado and Wyoming - 3%, in Alabama, Louisiana, Michigan, Georgia, South Dakota, Iowa - 4, highest in California - 7.25, Illinois - 8, New York - 8 .25%.
In accordance with American laws, a general sales tax is imposed on both gross proceeds from sales at each stage of circulation of goods and the turnover of services provided to the population. The objects of such taxation are gasoline, tobacco products, and alcoholic beverages.
The second most important for state budgets is personal income tax. It accounts for more than 30% of the states' total revenue. This tax is levied in almost all states (44 out of 50). In some states, where income tax is not levied, local governments are vested with such rights.
Taxation of incomes of the population in all states is carried out according to general principles, however, the rates and the amount of benefits provided for this tax are different. The minimum rate is 2%, the maximum is 10%. But for the purpose of uniformity and ease of use, most states calculate their rates as a certain percentage of the base, federal, tax. All states provide a non-taxable minimum for each payer. If the taxpayer is the head of the family, then the non-taxable minimum increases by 2 times. A similar exemption is also provided for each dependent.
Each state may have different objects of this tax. In some states, this is the income of citizens living in them received within these states, in others - profits that arose outside the borders of these states. There are states that impose an income tax on all income of taxpayers living or working in them, regardless of where it is earned. It is important to note that the amounts of income taxes paid by a taxpayer to state governments are deducted in determining his federal income tax liability.
Another source of state budget revenue is the corporate income tax. Its share of total state tax revenue is approximately 7%. This tax is not so much a fiscal lever of the state as a tool with which the state government can influence its economic situation and the development of the most profitable areas for the production of goods and services for a given territory. Income tax is levied in almost all states. Most states use proportional rates for this tax.
Many states provide companies with tax breaks. First of all, such preferences are provided for those corporations that invest their funds in a given territory. Significant discounts are also available to those companies whose activities are necessary for the state.
Almost all states impose a property tax. It is paid by both individuals and legal entities. Tax rates vary and range from 0.5 to 5%. The share of this tax in the total tax revenue of the state budget is approximately 2%.
Different states provide a variety of property tax benefits. Some states completely exempt companies that are registered for the first time in that state from this tax. Preferences are also provided for certain types of production, the development of which is necessary for a specific area. Most states are completely exempt from property tax and enjoy accelerated corporate depreciation on equipment used to clean up waste products and prevent pollution.
States also levy an inheritance tax. Its share of the state's total revenue is approximately 1%. Most states tax the heir's income. Tax rates are differentiated depending on the degree of relationship between the heir and the testator, as well as the size of the inheritance. However, the level of tax rates varies by state.
There are certain benefits for inheritance tax. First of all, we are talking about the non-taxable minimum, excluded from taxation, the value of which also varies by state. In some states, this tax is not paid if the recipient of the inheritance is the spouse of the deceased decedent.
At the state level, all kinds of excise taxes are levied. They are paid by consumers at different rates, the amount of which depends on the type of goods or services. All states tax different types of fuel at their own rates. They are set in cents per gallon (1 US gallon = 3.78 L) of fuel. The rates of this tax tend to increase.
States collect excise taxes on alcoholic beverages. In some, these taxes are set as a percentage of the volume of wholesale or retail sales, in others - the rates are expressed in dollars per gallon of the drink and vary depending on its strength.
Excise taxes are also taxes paid by corporations on the extraction of natural resources: oil, gas, coal, timber. In some states, instead of a property tax, a tax on extracted minerals is established. It is paid by the owners of these resources. The rates range from 3 to 5%. This tax is levied by states as compensation for the development of mineral resources in their territory. The share of this tax in the total tax revenue of state budgets averages 2%.
Each state charges licensing fees. They are paid annually by legal entities for the right to engage in certain types of activities in the territory of a given state. Their share of total state tax revenue is approximately 6%.
Another tax paid by companies at the state level is the capital tax, which has a rate of 0.75%.
Employers make mandatory contributions to pay unemployment benefits. The rates of such contributions vary by state and range from 2.7 to 7.5% of wages (from the first $8 million).
Some states, such as California, impose a business activity tax. The tax includes two elements: taxation of the enterprise's total annual turnover ranging from 1 to 2.5%, and a payroll tax. In California the latter is 1.6%.
Skype helps people around the world communicate and stay connected with those they care about. You can pay only for the calls you make or sign up for a calling plan, whichever suits you best. Regardless of which payment method you choose, prices shown include the cost of the product, as well as all applicable taxes and fees. Everything is very simple!
The percentage of tax charged may vary.
Alabama
Utility tax 6%
Alaska
There are currently no taxes or fees for the State of Alaska.
Arizona
There are currently no taxes or fees for the state of Arizona.
Arkansas
Local sales tax 0% - 5.5%
California
Utility tax 0% - 11%
Colorado
State Sales Tax 2.9%
Local sales tax 0% - 6%
Connecticut
Sales tax 6.35%
Delaware
There are currently no taxes or fees for the state of Delaware.
Columbia region
There are currently no taxes or fees for the District of Columbia.
Florida
State Communications Tax 6.65%
Local communication tax 0% - 7.6%
State Gross Income Tax 2.52%
Georgia
There are currently no taxes or fees for the state of Georgia.
Hawaii
There are currently no taxes or fees for the State of Hawaii.
Idaho
Idaho does not currently have taxes or fees.
Illinois
State Communications Tax 7%
Local communication tax 0% - 7%
State Infrastructure Tax 0.5%
Indiana
Iowa
Sales tax imposed by the county 0% - 1%
Kansas
State Sales Tax 6.15%
Local sales tax 0% - 5%
Kentucky
State Sales Tax 6%
Louisiana
State Sales Tax 2% - 3%
Local sales tax 0% - 7%
Maine
There are currently no taxes or fees for the state of Maine.
Maryland
Prince Georges County Communications Tax 8%
Massachusetts
Michigan
State Sales Tax 6%
Minnesota
State Sales Tax 6.875%
Local sales tax / import tax 0% - 1%
Mississippi
State Sales Tax 7%
Missouri
State Sales Tax 4.225%
Local sales tax 0.5% - 6.5%
Montana
State Excise Tax 3.75%
Nebraska
State Sales Tax 5.5%
Local sales tax imposed by the county up to 2%
Nevada
There are currently no taxes or fees for the state of Nevada.
New Hampshire
State tax 7%
New Jersey
State Sales Tax 7%
New Mexico
There are currently no taxes or fees for the state of New Mexico.
NY
Local sales tax 0% - 8%
North Carolina
State Sales Tax 7%
North Dakota
Local sales tax 0% - 3%
Ohio
State Sales Tax 5.75%
Local sales tax 0% - 2.25%
Oklahoma
State Sales Tax 4.5%
Local sales tax 0.25% - 6.5%
Oregon
There are currently no taxes or fees for the State of Oregon.
Pennsylvania
State Sales Tax 6%
Rhode Island
State Sales Tax 7%
South Carolina
There are currently no taxes or fees for the state of South Carolina.
South Dakota
There are currently no taxes or fees for the state of South Dakota.
Tennessee
State sales tax 7% - 9.5%
Local sales tax 0% - 2.75%
Texas
State sales tax 6.25%
Local sales tax 0% - 2%
Utah
State sales tax 4.7%
Local sales tax 1% - 3.65%
Vermont
State Sales Tax 6%
Local sales tax 0% - 1%
Virginia
Tax on sales of communication equipment 5%
Washington
State sales tax 6.5%
Local sales tax 0.5% - 3.1%
West Virginia
There are currently no taxes or fees for the state of West Virginia.
Wisconsin
State sales tax 5%
Local sales tax 0% - 0.6%
Wyoming
State sales tax 4%
Local sales tax 0% - 2%
In the US federal system, each state government decides how to generate revenue, that is, what taxes to collect and how. No two state tax codes are alike, largely as a result of the fact that average residents' earnings vary from state to state.
Magazine Wall Street looked at the tax burden of residents in each state. This tax burden does not include federal taxes paid by all Americans, regardless of state.
Approximately 78% of taxes paid by Americans go to their own state and local governments.
1. Alaska
- Interest tax rate on income: 6.5%
- Per capita income: $55,646
- Property tax per capita: $2,639
2. Wyoming
- Per capita income: $55,116
- Income tax per capita: $0
- Property tax per capita: $2,109
- Total sales taxes per capita: $1,384
3. North Dakota
- Interest tax rate on income: 7.1%
- Per capita income: $47,834
- Income tax per capita: $0
- Property tax per capita: $1,301
- Total sales taxes per capita: $1,131
4. Tennessee
- Interest tax rate on income: 7.3%
- Income tax per capita: $46
- Property tax per capita: $830
- Total sales taxes per capita: $992
5. Louisiana
- Per capita income: $43,326
- Income tax per capita: $639
- Property tax per capita: $839
- Total sales taxes per capita: $627
6. Texas
- Interest tax rate on income: 7.6%
- Per capita income: $46,274
- Income tax per capita: $0
- Property tax per capita: $1,635
- Total sales taxes per capita: $1,226
7. New Hampshire
- Interest tax rate on income: 7.9%
- Per capita income: $55,954
- Income tax per capita: $72
- Property tax per capita: $2,861
- Total sales taxes per capita: $0
8. Nevada
- Interest tax rate on income: 8.1%
- Per capita income: $43,567
- Income tax per capita: $0
- Property tax per capita: $953
- Total sales taxes per capita: $1,412
9. South Carolina
- Interest tax rate on income: 8.4%
- Per capita income: $39,517
- Income tax per capita: $764
- Property tax per capita: $1,080
- Total sales taxes per capita: $729
10. Oklahoma
- Per capita income: $42,692
- Income tax per capita: $832
- Property tax per capita: $623
- Total sales taxes per capita: $686
11. Mississippi
- Interest tax rate on income: 8.6%
- Per capita income: $35,484
- Income tax per capita: $596
- Property tax per capita: $916
- Total sales taxes per capita: $1,144
12. New Mexico
- Per capita income: $38,474
- Income tax per capita: $662
- Property tax per capita: $731
- Total sales taxes per capita: $1,082
13. Montana
- Interest tax rate on income: 8.7%
- Per capita income: $42,947
- Income tax per capita: $1,143
- Property tax per capita: $1,465
- Total sales taxes per capita: $0
14. Alabama
- Interest tax rate on income: 8.7%
- Per capita income: $38,896
- Income tax per capita: $687
- Property tax per capita: $522
- Total sales taxes per capita: $507
15. Arizona
- Interest tax rate on income: 8.8%
- Per capita income: $40,415
- Income tax per capita: $551
- Property tax per capita: $986
- Total sales taxes per capita: $947
16. Florida
- Per capita income: $45,953
- Income tax per capita: $0
- Property tax per capita: $1,184
- Total sales taxes per capita: $1,075
17. Colorado
- Interest tax rate on income: 8.9%
- Per capita income: $51,999
- Income tax per capita: $1,168
- Property tax per capita: $1,365
- Total sales taxes per capita: $516
18. North Dakota
- Percentage tax rate on income: 9.0%
- Per capita income: $54,627
- Income tax per capita: $709
- Property tax per capita: $1,121
- Total sales taxes per capita: $1,835
19. Georgia
- Percentage tax rate on income: 9.1%
- Per capita income: $42,159
- Income tax per capita: $947
- Property tax per capita: $1,087
- Total sales taxes per capita: $515
20. Nebraska
- Per capita income: $50,029
- Income tax per capita: $1,181
- Property tax per capita: $1,757
- Total sales taxes per capita: $943
21. Iowa
- Interest tax rate on income: 9.2%
- Per capita income: $46,000
- Income tax per capita: $1,111
- Property tax per capita: $1,525
- Total sales taxes per capita: $973
22. Idaho
- Per capita income: $39,470
- Income tax per capita: $893
- Property tax per capita: $928
- Total sales taxes per capita: $885
23. Virginia
- Interest tax rate on income: 9.3%
- Per capita income: $52,957
- Income tax per capita: $1,420
- Property tax per capita: $1,457
- Total sales taxes per capita: $452
24. Washington
- Interest tax rate on income: 9.3%
- Per capita income: $54,579
- Income tax per capita: $0
- Property tax per capita: $1,364
- Total sales taxes per capita: $1,746
25. Missouri
- Interest tax rate on income: 9.3%
- Per capita income: $42,926
- Income tax per capita: $963
- Property tax per capita: $960
- Total sales taxes per capita: $556
26. Michigan
- Interest tax rate on income: 9.4%
- Per capita income: $44,253
- Income tax per capita: $889
- Property tax per capita: $1,335
- Total sales taxes per capita: $928
27. Indiana
- Per capita income: $43,097
- Income tax per capita: $791
- Property tax per capita: $970
- Total sales taxes per capita: $1,100
28. Kansas
- Interest tax rate on income: 9.5%
- Per capita income: $47,228
- Income tax per capita: $777
- Property tax per capita: $1,435
- Total sales taxes per capita: $1,049
29. Kentucky
- Interest tax rate on income: 9.5%
- Per capita income: $38,926
- Income tax per capita: $920
- Property tax per capita: $737
- Total sales taxes per capita: $738
30. Utah
- Interest tax rate on income: 9.6%
- Per capita income: $40,925
- Income tax per capita: $1,054
- Property tax per capita: $969
- Total sales taxes per capita: $628
31. West Virginia
- Per capita income: $36,624
- Income tax per capita: $1,048
- Property tax per capita: $852
- Total sales taxes per capita: $701
32. Ohio
- Interest tax rate on income: 9.8%
- Per capita income: $44,593
- Income tax per capita: $765
- Property tax per capita: $1,203
- Total sales taxes per capita: $1,203
33. North Carolina
- Interest tax rate on income: 9.8%
- Per capita income: $42,244
- Income tax per capita: $1,115
- Property tax per capita: $951
- Total sales taxes per capita: $683
34. Arkansas
- Interest tax rate on income: 10.1%
- Per capita income: $39,722
- Income tax per capita: $895
- Property tax per capita: $675
- Total sales taxes per capita: $1,069
35. Maine
- Per capita income: $44,053
- Income tax per capita: $1,153
- Property tax per capita: $1,918
- Total sales taxes per capita: $963
36. Pennsylvania
- Interest tax rate on income: 10.2%
- Per capita income: $50,742
- Income tax per capita: $897
- Property tax per capita: $1,405
- Total sales taxes per capita: $771
37. Hawaii
- Interest tax rate on income: 10.2%
- Per capita income: $50,363
- Income tax per capita: $1,389
- Property tax per capita: $980
- Total sales taxes per capita: $2,090
38. Delaware
- Interest tax rate on income: 10.2%
- Per capita income: $47,869
- Income tax per capita: $1,205
- Property tax per capita: $828
- Total sales taxes per capita: $0
39. Oregon
- Per capita income: $45,399
- Income tax per capita: $1,814
- Property tax per capita: $1,350
- Total sales taxes per capita: $0
40. Vermont
- Interest tax rate on income: 10.3%
- Per capita income: $49,984
- Income tax per capita: $1,133
- Property tax per capita: $2,339
- Total sales taxes per capita: $586
41. Massachusetts
- Interest tax rate on income: 10.3%
- Per capita income: $64,235
- Income tax per capita: $2,133
- Property tax per capita: $2,181
- Total sales taxes per capita: $854
42. Minnesota
- Interest tax rate on income: 10.3%
- Per capita income: $52,038
- Income tax per capita: $1,889
- Property tax per capita: $1,411
- Total sales taxes per capita: $999
43. Rhode Island
- Interest tax rate on income: 10.8%
- Per capita income: $50,427
- Income tax per capita: $1,151
- Property tax per capita: $2,307
- Total sales taxes per capita: $908
44. Maryland
- Interest tax rate on income: 10.9%
- Per capita income: $58,052
- Income tax per capita: $1,390
- Property tax per capita: $1,491
- Total sales taxes per capita: $734
45. Wisconsin
- Per capita income: $46,762
- Income tax per capita: $1,225
- Property tax per capita: $1,657
- Total sales taxes per capita: $848
46. Illinois
- Interest tax rate on income: 11.0%
- Per capita income: $51,817
- Income tax per capita: $1,237
- Property tax per capita: $2,007
- Total sales taxes per capita: $696
47. California
- Interest tax rate on income: 11.0%
- Per capita income: $56,374
- Income tax per capita: $1,991
- Property tax per capita: $1,385
- Total sales taxes per capita: $983
48. New Jersey
- Interest tax rate on income: 12.2%
- Per capita income: $61,472
- Income tax per capita: $1,479
- Property tax per capita: $3,065
- Total sales taxes per capita: $1,021
49. Connecticut
- Interest tax rate on income: 12.6%
- Per capita income: $69,311
- Income tax per capita: $2,279
- Property tax per capita: $2,774
- Total sales taxes per capita: $1,137
50. New York
- Interest tax rate on income: 12.7%
- Per capita income: $59,563
- Income tax per capita: $2,208
- Property tax per capita: $2,581
- Total sales taxes per capita: $662
A variety of cultural, historical, and economic factors help explain the differences in taxes in each state. At the heart of the state's tax system is what Tax Foundation experts characterize as a bargain between residents and their governments.
“The level of services that citizens of a particular state want is a very personal decision for that state,” Tax Foundation analyst Morgan Scarborough said in an interview.
Taxes are an integral part of state budget revenue. However, the tax structure may negatively impact the competitiveness of the state's business environment. State Business Tax Climate Index - Helps government identify its strengths and weaknesses and develop policies to improve the state's performance in an effort to achieve Wyoming's results.
Today's marketplace is characterized by the mobility of capital and labor, with all types of businesses, small and large, seeking to determine where they have the greatest competitive advantage. Evidence suggests that states with the best tax systems will be the most competitive in attracting new businesses and the most effective in generating economic growth and employment. Although taxes are only one of the factors in making a decision on choosing a country to do business, it is the simplicity, transparency and flexibility of the tax system that positively influences the decision. It is also worth noting that it is changes in the Tax Code that are rapidly improving the business climate of the state.
The State Business Tax Climate Index helps measure a state's tax competitiveness.
Tax competition is an unfortunate reality for government employees and public sector employees, but it is an effective moderation of state and local taxes. When a state imposes higher taxes than a neighboring state, businesses will move to another state. That's why states with more competitive tax systems perform well in the Index because they are best positioned to drive economic growth. The government analyzes the position of its state in the ranking and takes measures to improve the situation. Some states are trying to entice businesses with lucrative tax breaks and subsidies instead of implementing sweeping tax reform.
The State Tax Climate Index allows business leaders, government officials and taxpayers to evaluate and compare their states' tax systems. While there are many ways to show how much taxes are collected by state governments, the index was designed to show how states structure their tax systems and provide recommendations for improvement.
Table 1. TOP 10 states in the 2017 State Tax Climate Index
| TOP 10 best states in 2016 | TOP 10 worst states in 2016 | ||
| Place | State | Place | State |
| 1 | Wyoming | 41 | Louisiana |
| 2 | South Dakota | 42 | Maryland |
| 3 | Alaska | 43 | Connecticut |
| 4 | Florida | 44 | Rhode Island |
| 5 | Nevada | 45 | Ohio |
| 6 | Montana | 46 | Minnesota |
| 7 | New Hampshire | 47 | Vermont |
| 8 | Indiana | 48 | California |
| 9 | Utah | 49 | NY |
| 10 | Oregon | 50 | New Jersey |
The lack of a core tax is a common factor among the top ten states. Property taxes and unemployment insurance taxes are collected in every state, but there are a few states that do without one or more of the major taxes: corporate tax, personal income tax, or sales tax.
- Wyoming, Nevada and South Dakota. There is no corporate or personal income tax (although Nevada does impose gross receipts taxes);
- Alaska has no personal income tax or state sales tax;
- Florida has no personal income tax;
- New Hampshire, Montana and Oregon do not have a sales tax.
However, some of the top 10 states levy basic taxes, but tax them at low rates and on a broad basis. Prominent representatives are Indiana and Utah.
- some of the highest property taxes in the country,
- inheritance tax and property tax,
- some of the worst structural income taxes in the country.
| Overall rating | Corporate tax | Income tax for individuals | sales tax | Unemployment Insurance Tax | Property tax | |
| Alabama | 32 | 14 | 22 | 48 | 14 | 16 |
| Alaska | 3 | 27 | 1 | 5 | 29 | 22 |
| Arizona | 21 | 19 | 19 | 47 | 13 | 6 |
| Arkansas | 38 | 40 | 29 | 44 | 30 | 24 |
| California | 48 | 33 | 50 | 40 | 16 | 15 |
| Colorado | 16 | 18 | 16 | 39 | 42 | 14 |
| Connecticut | 43 | 32 | 37 | 27 | 21 | 49 |
| Delaware | 19 | 50 | 34 | 1 | 3 | 20 |
| Florida | 4 | 19 | 1 | 28 | 2 | 10 |
| Georgia | 36 | 10 | 42 | 33 | 35 | 21 |
| Hawaii | 26 | 11 | 31 | 23 | 24 | 17 |
| Idaho | 20 | 24 | 23 | 26 | 46 | 2 |
| Illinois | 23 | 26 | 10 | 35 | 38 | 46 |
| Indiana | 8 | 23 | 11 | 10 | 10 | 4 |
| Iowa | 40 | 47 | 33 | 21 | 34 | 40 |
| Kansas | 22 | 39 | 18 | 30 | 11 | 19 |
| Kentucky | 34 | 28 | 30 | 13 | 48 | 36 |
| Louisiana | 41 | 36 | 27 | 50 | 9 | 30 |
| Maine | 30 | 41 | 25 | 8 | 44 | 41 |
| Maryland | 42 | 21 | 46 | 14 | 26 | 42 |
| Massachusetts | 27 | 37 | 13 | 18 | 49 | 45 |
| Michigan | 12 | 8 | 14 | 9 | 47 | 25 |
| Minnesota | 46 | 43 | 45 | 25 | 28 | 33 |
| Mississippi | 28 | 12 | 20 | 38 | 5 | 35 |
| Missouri | 15 | 5 | 28 | 24 | 7 | 7 |
| Montana | 6 | 13 | 21 | 3 | 19 | 9 |
| Nebraska | 25 | 29 | 24 | 12 | 8 | 39 |
| Nevada | 5 | 34 | 1 | 41 | 43 | 8 |
| New Hampshire | 7 | 46 | 9 | 2 | 41 | 43 |
| New Jersey | 50 | 42 | 48 | 45 | 25 | 50 |
| New Mexico | 35 | 25 | 35 | 42 | 17 | 1 |
| NY | 49 | 7 | 49 | 43 | 32 | 47 |
| North Carolina | 11 | 4 | 15 | 19 | 6 | 31 |
| North Dakota | 29 | 16 | 36 | 34 | 15 | 3 |
| Ohio | 45 | 45 | 47 | 29 | 4 | 11 |
| Oklahoma | 31 | 9 | 38 | 36 | 1 | 12 |
| Oregon | 10 | 35 | 32 | 4 | 33 | 18 |
| Pennsylvania | 24 | 44 | 17 | 20 | 45 | 32 |
| Rhode Island | 44 | 31 | 39 | 22 | 50 | 44 |
| South Carolina | 37 | 15 | 41 | 31 | 37 | 26 |
| South Dakota | 2 | 1 | 1 | 32 | 40 | 23 |
| Tennessee | 13 | 22 | 8 | 46 | 23 | 29 |
| Texas | 14 | 49 | 6 | 37 | 12 | 37 |
| Utah | 9 | 3 | 12 | 17 | 22 | 5 |
| Vermont | 47 | 38 | 44 | 16 | 20 | 48 |
| Virginia | 33 | 6 | 40 | 11 | 39 | 28 |
| Washington | 17 | 48 | 6 | 49 | 18 | 27 |
| West Virginia | 18 | 17 | 26 | 15 | 27 | 13 |
| Wisconsin | 39 | 30 | 43 | 7 | 36 | 34 |
| Wyoming | 1 | 1 | 1 | 6 | 31 | 38 |
| Columbia region | 47 | 31 | 43 | 33 | 27 | 47 |
| Note | ||||||
| The rating was compiled not in average values, but in relation to the total amount. | ||||||
| The report shows tax systems as of July 1, 2016 (beginning of fiscal year 2017). | ||||||
| Source: Tax Foundation. | ||||||
Notable Changes in the State Business Tax Climate Index This Year
Arizona moved from 22nd to 19th place in the ranking thanks to a systematic reduction in the corporate tax rate that began in 2015. In 2016, there was a decrease from 6.0 to 5.5 percent. The rate reduction was facilitated by restrictions on loans and other tax preferences.
Arkansas dropped in the ranking by 1 point from 29th to 30th place, lowering its top income tax level from 7% to 6.9%, but adopting new tariff schedules. Thus, this state is the only state in the United States where the tax amount depends on income level.
End of temporary tax increase Hawaii resulted in the elimination of three top income tax rates for individuals and a reduction in the top marginal rate from 11 to 8.25 percent. Although income taxes remain unusually high, the changes improved the state's ranking, moving it from 37th to 31st for personal income taxes and from 30th to 27th overall.
Last year Indiana completed a four-year gradual reduction in the corporate tax rate from 8.5% to 6.5% under a law passed in 2011. In 2014, a new law was passed setting a new schedule for reducing the corporate tax rate to 4.9% through fiscal year 2022. By 2017, the rate decreased from 6.5% to 6.25%. This rate reduction, coupled with the elimination of the state tax refund rule, allowed the state to rise in the corporate tax ranking from 24th to 23rd place, and from 10th to 8th place overall.
State Maine slightly improved its position, rising from 26th to 25th place in income tax for individuals as a result of changes made to the principle of collecting income tax from individuals. A third group was added (which hurt the state's overall score) and the tax rate was lowered (which improved the state's overall score). The rates were reduced from 6.5% and 7.95% to three rates of 5.8%, 6.75% and 7.15%.
Thanks to the policy adopted 2 years ago New York package of corporate tax reforms, successfully applied to this day, the state improved its position in the ranking, rising from 11th to 7th place. In 2016, the corporate tax rate decreased from 7.1% to 6.5%, and the tax rate on fixed capital - from 0.15% to 0.125%. The capital asset tax is on track to be eliminated, which can be expected to improve state property tax positions in future editions of the Index.
After the most significant improvement in the history of the index - from 41st to 11th place in one year - North Carolina continued to improve its tax structure and now imposes the lowest corporate tax rate in the country at 4 percent, down from 5 percent the previous year. These rate cuts allowed the state to move from 6th to 4th in corporate tax and to become second (behind Utah) among states with a major corporate tax. For 2017, it is planned to reduce the personal income tax from 5.75 to 5.499%.
Oklahoma improved its position, rising from 40th to 38th place in personal income tax, as the first of two stages of reducing the personal income tax rate from 5.25% to 5% was completed during the year. The second stage involves reducing the rate to 4.85%.
Pennsylvania moved from 38th place to 32nd place in property tax due to the fact that in 2016 the tax on fixed capital was completely eliminated. Combined with improvements to the state's unemployment insurance tax system in the past, eliminating the capital asset tax led to an improvement in the state's ranking (from 28th to 24th overall).
South Dakota increased the sales tax from 4.0 to 4.5 percent. As a result, the state moved from 27th to 32nd place in the ranking for this tax. However, South Dakota still ranks No. 2 overall due to its elimination of personal and corporate income taxes. Sales tax in South Dakota is levied at a low rate and is based on a wide range of business materials.
Tax rate on gross receipts (marginal tax) in Texas decreased from 0.95% to 0.75%. This improvement impacted the state's corporate tax score but did not translate into an improvement in the state's corporate tax rating. Texas dropped slightly in ranking due to a relative decline in its property tax ranking.
In 2014 Columbia region began gradually introducing a package of tax reforms aimed at reducing income taxes for individuals with average incomes, expanding the sales tax base and increasing the conditions for exemption from property taxes. On the corporate tax front, the District of Columbia improved its performance by reducing its size. Due to the addition of new restrictions in the rules for collecting personal income tax for this indicator, the district dropped from 34th to 43rd place.
| State | 2014 | 2015 | 2016 | 2017 | Changes from 2016 to 2017 |
|||||
| Place | Glasses | Place | Glasses | Place | Glasses | Place | Glasses | Place | Glasses | |
| Alabama | 35 | 4.88 | 36 | 4.79 | 35 | 4.76 | 32 | 4.91 | +3 | +0.15 |
| Alaska | 4 | 7.27 | 4 | 7.27 | 3 | 7.38 | 3 | 7.29 | 0 | -0.09 |
| Arizona | 22 | 5.18 | 24 | 5.13 | 22 | 5.19 | 21 | 5.21 | +1 | +0.02 |
| Arkansas | 38 | 4.72 | 40 | 4.61 | 41 | 4.50 | 38 | 4.60 | +3 | +0.10 |
| California | 48 | 3.78 | 48 | 3.76 | 48 | 3.76 | 48 | 3.76 | 0 | 0.00 |
| Colorado | 18 | 5.31 | 18 | 5.34 | 16 | 5.40 | 16 | 5.38 | 0 | -0.02 |
| Connecticut | 43 | 4.48 | 43 | 4.45 | 43 | 4.35 | 43 | 4.34 | 0 | -0.01 |
| Delaware | 15 | 5.49 | 15 | 5.45 | 14 | 5.52 | 19 | 5.32 | -5 | -0.20 |
| Florida | 5 | 6.85 | 5 | 6.84 | 4 | 6.89 | 4 | 6.86 | 0 | -0.03 |
| Georgia | 37 | 4.72 | 38 | 4.70 | 39 | 4.61 | 36 | 4.68 | +3 | +0.07 |
| Hawaii | 32 | 4.93 | 32 | 4.93 | 30 | 4.93 | 26 | 5.13 | +4 | +0.20 |
| Idaho | 19 | 5.29 | 20 | 5.25 | 20 | 5.22 | 20 | 5.22 | 0 | 0.00 |
| Illinois | 28 | 4.98 | 31 | 4.94 | 23 | 5.18 | 23 | 5.21 | 0 | +0.03 |
| Indiana | 10 | 5.82 | 10 | 5.80 | 10 | 5.81 | 8 | 5.96 | +2 | +0.15 |
| Iowa | 40 | 4.58 | 41 | 4.56 | 40 | 4.53 | 40 | 4.51 | 0 | -0.02 |
| Kansas | 20 | 5.23 | 21 | 5.20 | 21 | 5.22 | 22 | 5.21 | -1 | -0.01 |
| Kentucky | 27 | 5.00 | 33 | 4.92 | 33 | 4.91 | 34 | 4.88 | -1 | -0.03 |
| Louisiana | 33 | 4.91 | 35 | 4.87 | 36 | 4.72 | 41 | 4.39 | -5 | -0.33 |
| Maine | 24 | 5.08 | 29 | 4.97 | 31 | 4.92 | 30 | 4.96 | +1 | +0.04 |
| Maryland | 42 | 4.48 | 42 | 4.48 | 42 | 4.40 | 42 | 4.36 | 0 | -0.04 |
| Massachusetts | 23 | 5.17 | 25 | 5.12 | 25 | 5.15 | 27 | 5.13 | -2 | -0.02 |
| Michigan | 11 | 5.69 | 12 | 5.59 | 12 | 5.61 | 12 | 5.64 | 0 | +0.03 |
| Minnesota | 47 | 4.18 | 47 | 4.16 | 46 | 4.19 | 46 | 4.19 | 0 | 0.00 |
| Mississippi | 21 | 5.22 | 22 | 5.18 | 26 | 5.13 | 28 | 5.13 | -2 | 0.00 |
| Missouri | 13 | 5.52 | 16 | 5.44 | 17 | 5.39 | 15 | 5.45 | +2 | +0.06 |
| Montana | 6 | 6.36 | 6 | 6.33 | 6 | 6.31 | 6 | 6.27 | 0 | -0.04 |
| Nebraska | 26 | 5.01 | 23 | 5.16 | 24 | 5.15 | 25 | 5.14 | -1 | -0.01 |
| Nevada | 3 | 7.45 | 3 | 7.43 | 5 | 6.45 | 5 | 6.46 | 0 | +0.01 |
| New Hampshire | 7 | 6.13 | 7 | 6.09 | 7 | 6.14 | 7 | 6.11 | 0 | -0.03 |
| New Jersey | 49 | 3.50 | 50 | 3.49 | 50 | 3.42 | 50 | 3.41 | 0 | -0.01 |
| New Mexico | 34 | 4.90 | 34 | 4.87 | 34 | 4.88 | 35 | 4.85 | -1 | -0.03 |
| NY | 50 | 3.40 | 49 | 3.56 | 49 | 3.59 | 49 | 3.61 | 0 | +0.02 |
| North Carolina | 41 | 4.52 | 11 | 5.60 | 11 | 5.67 | 11 | 5.73 | 0 | +0.06 |
| North Dakota | 30 | 4.96 | 26 | 4.99 | 27 | 4.99 | 29 | 4.98 | -2 | -0.01 |
| Ohio | 44 | 4.24 | 44 | 4.25 | 45 | 4.23 | 45 | 4.27 | 0 | +0.04 |
| Oklahoma | 31 | 4.93 | 28 | 4.97 | 32 | 4.92 | 31 | 4.95 | +1 | +0.03 |
| Oregon | 9 | 5.88 | 9 | 5.86 | 9 | 5.91 | 10 | 5.78 | -1 | -0.13 |
| Pennsylvania | 29 | 4.98 | 30 | 4.94 | 28 | 4.95 | 24 | 5.18 | +4 | +0.23 |
| Rhode Island | 46 | 4.22 | 45 | 4.20 | 44 | 4.33 | 44 | 4.30 | 0 | -0.03 |
| South Carolina | 36 | 4.75 | 37 | 4.72 | 37 | 4.69 | 37 | 4.66 | 0 | -0.03 |
| South Dakota | 2 | 7.56 | 2 | 7.55 | 2 | 7.47 | 2 | 7.49 | 0 | +0.02 |
| Tennessee | 14 | 5.51 | 14 | 5.46 | 15 | 5.44 | 13 | 5.58 | +2 | +0.14 |
| Texas | 12 | 5.52 | 13 | 5.47 | 13 | 5.55 | 14 | 5.57 | -1 | +0.02 |
| Utah | 8 | 6.05 | 8 | 5.98 | 8 | 5.98 | 9 | 5.96 | -1 | -0.02 |
| Vermont | 45 | 4.22 | 46 | 4.19 | 47 | 4.17 | 47 | 4.13 | 0 | -0.04 |
| Virginia | 25 | 5.01 | 27 | 4.99 | 29 | 4.94 | 33 | 4.90 | -4 | -0.04 |
| Washington | 16 | 5.41 | 17 | 5.37 | 18 | 5.38 | 17 | 5.38 | +1 | 0.00 |
| West Virginia | 17 | 5.31 | 19 | 5.31 | 19 | 5.36 | 18 | 5.32 | +1 | -0.04 |
| Wisconsin | 39 | 4.63 | 39 | 4.67 | 38 | 4.63 | 39 | 4.57 | -1 | -0.06 |
| Wyoming | 1 | 7.78 | 1 | 7.79 | 1 | 7.76 | 1 | 7.76 | 0 | 0.00 |
| Columbia region | 44 | 4.47 | 44 | 4.43 | 40 | 4.54 | 47 | 4.19 | -7 | -0.35 |
| Note: 1st place - the best, 50th - the worst. | ||||||||||
| Source: Tax Foundation. | ||||||||||
