Kentucky Ranks Below Average on Business Tax Climate Index

A rendering of General Electric Co. headquarters in Boston. Analysts cite tax rates as the reason for moving the corporate headquarters from Connecticut to Massachusetts

Maine's business climate has improved slightly under LePage, Tax watchdog says

Wyoming may have the smallest population in the U.S., but it also has the most competitive tax code in the nation, according to the Tax Foundation's newly-released 2018 State Business Tax Climate Index.

"The goal of the Index is to start a conversation between taxpayers and legislators about how their tax system compares with other states, and provide a roadmap for improvement", said lead-report author Jared Walczak, a senior policy analyst at the Tax Foundation.

The Tax Foundation focused on five major taxes - individual income, corporate, property and sales - as well as unemployment insurance.

The think-tank said states with complicated tax codes did poorly on the ranking, while states with transparent, neutral and fair tax codes did well. "We now have the lowest corporate tax rate since 1968, the lowest manufacturers tax rate since 1917 and, with the new income tax cuts phasing in this year, the lowest middle class tax rates since 1947".

Temporary tax increases have "backfired in the past" and forced the state to offer "significant preferences" in the code for select business to keep them from fleeing to other states, he said.

"This year, a lot of states took a wait and see approach".

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Jared Walczak, with the Tax Foundation, said OH uses an "antiquated" model to tax businesses.

"This is an unusual and unique aspect of IL governance - no other state has a category called unpaid bills", Walczak said. Of course, this is not news to most business people in the Cowboy State.

The worst environment for business, according to The Tax Foundation: New Jersey.

The Index also serves as a tool for identifying state tax trends.

No matter what federal tax reform looks like, Walczak said this is an opportunity for states to reevaluate their own codes and see how they can make them better. LePage has tried for years to reform the tax code by reducing the income tax - which he has done for the top rate, from 8.5 percent in 2011 to 7.15 percent now - and expanding the goods and services that are subject to the sales tax. The nonpartisan Tax Foundation is doing the same of the Hoosier state.

Wyoming tops the list for 2018, followed by South Dakota, Alaska, Florida and Nevada.

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