October 9, 2013

Think tank: Maine 29th in terms of business climate

The top five states this year are Wyoming, South Dakota, Nevada, Alask and Florida, according to the conservative group Tax Foundation.

By J. Craig Anderson canderson@pressherald.com
Staff Writer

Maine ranks 29th among the 50 states in terms of having the most business-friendly tax climate, says the Tax Foundation, a conservative-leaning think tank based in Washington, D.C.

Just two weeks ago, Forbes Magazine ranked Maine the worst state in the country for business.

The Tax Foundation, which issued its annual State Business Tax Climate Index rankings on Wednesday, said Maine’s ranking remains unchanged from last year.

The top 10 states in this year’s index, in order, are Wyoming, South Dakota, Nevada, Alaska, Florida, Washington, Montana, New Hampshire, Utah and Indiana.

The bottom 10 states are Maryland (41), Connecticut (42), Wisconsin (43), North Carolina (44), Vermont (45), Rhode Island (46), Minnesota (47), California (48), New Jersey (49) and New York (50).

Analysts say states in the Northeast generally fare poorly in the Tax Foundation’s rankings because they tax corporations more heavily and have complicated tax codes.

Several Western states, including Nevada and Washington, usually rank high because they have no state income tax, the analysts said, and New Hampshire and Alaska do well in the rankings because they have no state sales tax.

Tax Foundation economist Scott Drenkard said in a news release that the rankings are based on each state’s tax code, particularly whether it is simple and easy for businesses to follow or complex and burdensome.

The index, now in its 10th year, collects data on more than 100 tax provisions for each state and synthesizes them into a single score.

The states are then compared, so that each state’s ranking is relative to policies in other states. A state’s ranking can rise or fall based on its own actions, and on changes or reforms made by other states.

“The goal of the State Business Tax Climate Index is to start a conversation with policy makers about how their states fare against the rest of the country,” Drenkard said. “With this report, we’re asking, ‘How well is your tax code structured? Are businesses in your state spending too much time complying with onerous tax provisions? Are you double-taxing things you shouldn’t?’ ”

Maine fared much better in the Tax Foundation’s rankings than it did on Forbes Magazine’s list. Last month, Forbes ranked Maine as the worst state for business.

“Not much has changed,” says Forbes’ article on the 2013 rankings. “(Maine) is still burdened with an aging population and a weak economic forecast. Job growth projections are the worst in the U.S. and only Vermont is expected to have slower household income growth over the next five years, according to Moody’s Analytics.”

J. Craig Anderson can be contacted at 791-6390 or at:

canderson@pressherald.com

@JCraigAnderson

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