In a recent report, Florida’s business climate was ranked number four in the nation. The Tax Foundation releases a State Business Climate Index each year which reports on each state’s “friendliness” to business measured by studying taxes.
The foundation says its index “enables business leaders, government policymakers, and taxpayers to gauge how their states’ tax systems compare … the Index is designed to show how well states structure their tax systems, and provides a roadmap for improvement.”
The index shows how well states structure their taxes, not how much money is collected in taxes. For those lower in the ranks, the index can help provide a roadmap for improvement.
The top ten in order are Wyoming, South Dakota, Alaska, Florida, Nevada, Montana, New Hampshire, Indiana, Utah, and Texas. The bottom 10 states are Maryland, Ohio, Wisconsin, Connecticut, Rhode Island, Vermont, Minnesota, California, New York and, in last place, New Jersey.
The Tax Journal uses five categories to make their decision: Florida ranked 17 in taxes on corporations, tied for first for taxes on individuals, 17 for sales tax rate, 3 for unemployment insurance taxes and 20 for taxes on property. Florida moved up in the rankings from fifth after Nevada slipped from third to fifth. But what makes Florida’s business climate so great?
“The absence of a major tax is a common factor among many of the top ten states,” the Tax Foundation noted. For Florida, that is the absence of an individual income tax. Florida’s well structured corporate income tax and the state’s impressive unemployment insurance plan also help it reach not just the top ten, but the top five.
“The state essentially competes very effectively by having middle-of-the-road structures and rates on sales and property and corporate taxation, no individual income tax whatsoever, and an extremely competitive unemployment insurance tax structure,” Jared Walczak, an analyst with the foundation’s state policy team said the the Orlando Sentinel.
The results of this index indicate great aspects of Florida’s business climate and economy. Come join prosper of the Sunshine State and start by buying your dream home in Miami with RE/MAX Paradise!