A Tax Foundation study released Wednesday said Colorado has the eighth most friendly business climate, according to its tax laws.
The states with the most business-friendly tax laws tend to have codes that are neutral; tax rates that are low or flat; simple and transparent tax laws; and constitutional restraints that keep those laws low over time, according to a press release issued by the nonpartisan, nonprofit Tax Foundation.
States with the least-friendly tax codes have complicated rates for corporations and individuals that tend to be above average; above-average sales tax rates that donít exempt business-to-business purchases; complex, high-rate unemployment tax systems; and high overall state tax collections with few controls on taxes or expenditures.
According to the study, South Dakota has the most business-friendly tax codes, followed by Florida, Alaska, Texas and New Hampshire. Nevada and Wyoming are six and seven, and rounding out the top 10 following Colorado are Washington and Oregon.
The top 10 states with the least business-friendly tax codes are, in order, Hawaii, New York, Minnesota, West Virginia, Rhode Island, Vermont, Kentucky, Arkansas, Maine and Wisconsin.
The study also notes that tax incentives donít always pay off in ways a state might hope. It recounts how, in 1996, Florida lawmakers lured a major credit card company to open a call center there with $4 million in incentives, only to have the center close earlier this year, costing 1,100 workers their jobs.