Since Amazon announced in September 2017 its plans to build a second headquarters, state and local governments have tried to compete by offering the online retail giant a variety of tax break schemes. The flurry of proposals from more than 200 cities has put the spotlight on state business taxes and how they vary across the country.
State tax codes are complex. Several factors, in addition to the corporate tax rate, determine how tax-friendly a state is — and how competitive its business environment is. Every year, the Tax Foundation, a think tank focused on tax policy research and education, ranks each state’s business tax climate based on more than 100 variables.
Based on the Tax Foundation’s 2018 State Business Tax Climate Index, 24/7 Wall St. reviewed the states with the best and worst business tax environments. According to the report, Wyoming is the most tax-friendly state for business, while New Jersey is the worst.