Since 2011, Louisiana has seen its ranking on the Tax Foundation’s annual “State Business Tax Climate Index” fall six spots, with the latest ranking placing Tte Bayou State at No. 37, down two spots from a year ago.
In compiling the overall rankings each year, the Washington, D.C.-based nonprofit considers five tax components in each state: individual income tax, sales tax, corporate income tax, property tax and unemployment insurance tax. Louisiana’s overall ranking continues to be hampered by its worst-in-the-nation ranking for its sales taxes. The state has been ranked No. 50 in this category for years in the Tax Foundation index.
In the latest annual index, released today, Louisiana also ranks No. 38 for its corporate taxes, No. 28 for property taxes, No. 27 for individual income taxes and No. 5 for unemployment insurance taxes. The Tax Foundation compiles an overall index score based on the category rankings, and this year Louisiana’s score is 4.7, down from 4.83 a year ago.
The top-ranked state for business tax climate is Wyoming, which has an index score of 7.54, while New Jersey is at the bottom of this year’s rankings with a 3.36 score.
“It is important to remember that even in our global economy, states’ stiffest competition often comes from other states,” the Tax Foundation says in its report. “State lawmakers are right to be concerned about how their states rank in the global competition for jobs and capital, but they need to be more concerned with companies moving from Detroit, Michigan, to Dayton, Ohio, than from Detroit to New Delhi. This means that state lawmakers must be aware of how their states’ business climates match up against their immediate neighbors and to other regional competitor states.”
Louisiana’s immediate neighbors are ranked as follows in this year’s index: Texas, No. 10; Arkansas, No. 38; and Mississippi, No. 20. Among other states in the Southeast, Alabama is No. 29, Georgia is No. 39 and Florida is No. 4. See the complete 2016 State Business Tax Climate Index.
The Committee of 100 for Economic Development, or C100, released a comprehensive study on Louisiana fiscal reform last week that it commissioned the Tax Foundation to complete. C100 is a private nonprofit organization whose members includes the top CEOs of leading private and public companies in Louisiana and university presidents.
