The Tax Foundation ranks Louisiana 23rd on its list of the most business-friendly states when it comes to property taxes, up one spot from last year.
Though property tax rates in Louisiana are low, the state’s franchise tax on businesses, otherwise known as a capital stock tax, brought down the ranking. Such taxes create disincentives for investment, the Washington, D.C.-based foundation argues.
“States are in a better position to attract business investment when they maintain competitive real property tax rates and avoid harmful taxes on tangible personal property, intangible property, wealth, and asset transfers,” the foundation’s report states.
The ranking is based on property tax collections per capita, collections as a percentage of personal income, and capital stock/franchise taxes.
Louisiana had the sixth-lowest effective tax rate at 1.93%, while being tied with Arkansas for the highest capital stock/franchise rate of 0.3%. Only 16 states charge a capital stock/franchise tax, according to the foundation.
Indiana ranks first on this year’s list, while Connecticut ranks last.
The foundation ranks Louisiana’s business tax climate 42nd overall.