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Ranking Property Taxes by State | Property Tax Ranking

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As we speak’s map exhibits states’ rankings on the property tax element of our 2022 State Enterprise Tax Local weather Index. The Index’s property tax element evaluates state and native taxes on actual and private property, internet value, and asset transfers. The property tax element accounts for 14.4 % of every state’s total Index rating.

Property taxes matter to companies for a number of causes. First, companies personal a major quantity of actual property, and tax charges on business property are sometimes larger than the charges on comparable residential property. Many states and localities additionally levy taxes not solely on the land and buildings a enterprise owns but in addition on tangible property, akin to equipment, tools, and workplace furnishings, in addition to intangible property like patents and logos. Throughout the nation, property taxes impose one of the crucial substantial state and native tax burdens most companies face. In fiscal yr 2020, taxes on actual, private, and utility property accounted for virtually 38 percent of all taxes paid by companies to state and native governments, in keeping with the Council on State Taxation.

Though taxes on actual property are typically unpopular with the general public, a well-structured actual property tax typically conforms to the profit precept (the concept in public finance that taxes paid ought to relate to advantages acquired) and is extra clear than most different taxes.

Taxes on intangible property, wealth, and asset transfers, alternatively, are dangerous and distortive. States that levy such taxes—together with capital inventory taxes, stock and intangible property taxes, and property, inheritance, reward, and actual property switch taxes—are much less economically engaging, as they create disincentives for funding and encourage companies to make decisions based mostly on the tax code that they might not make in any other case. Companies with beneficial logos could search to keep away from headquartering in states with intangible property taxes, and transport and distribution networks is perhaps formed by the presence or absence of stock taxes.

States are in a greater place to draw enterprise funding after they keep aggressive actual property tax charges and keep away from dangerous taxes on tangible private property, intangible property, wealth, and asset transfers. This yr, the states with the most effective scores on the property tax element are Indiana, New Mexico, Idaho, Delaware, Nevada, and Ohio. States with the worst scores on this element are Connecticut, Vermont, Illinois, New York, New Hampshire, Massachusetts, New Jersey, plus the District of Columbia.

Ranking property taxes by state property tax ranking on intangible property wealth and asset on 2022 State Business Tax Climate Index

To gauge whether or not your state’s property tax construction has turn into kind of aggressive in recent times, see the next desk. (Methodological adjustments are backcast to prior years to facilitate comparability.)

Property Tax Part of the State Enterprise Tax Local weather Index (2019–2022)
State 2019 Rank 2020 Rank 2021 Rank 2022 Rank Change from 2021 to 2022
Alabama 19 18 19 19 0
Alaska 22 23 23 24 -1
Arizona 11 11 10 11 -1
Arkansas 26 25 26 27 -1
California 13 15 14 14 0
Colorado 33 33 33 34 -1
Connecticut 50 50 50 50 0
Delaware 4 4 4 4 0
Florida 12 12 12 12 0
Georgia 29 30 25 25 0
Hawaii 21 26 29 30 -1
Idaho 3 3 3 3 0
Illinois 48 48 48 48 0
Indiana 2 2 2 1 1
Iowa 38 38 38 39 -1
Kansas 31 31 31 31 0
Kentucky 23 21 22 22 0
Louisiana 27 27 24 23 1
Maine 40 40 40 41 -1
Maryland 41 41 43 43 0
Massachusetts 45 44 45 45 0
Michigan 25 24 20 21 -1
Minnesota 32 32 32 32 0
Mississippi 37 37 37 38 -1
Missouri 9 9 8 8 0
Montana 30 28 28 29 -1
Nebraska 39 39 41 40 1
Nevada 5 6 5 5 0
New Hampshire 46 45 47 46 1
New Jersey 44 46 44 44 0
New Mexico 1 1 1 2 -1
New York 47 47 46 47 -1
North Carolina 14 13 13 13 0
North Dakota 6 7 11 10 1
Ohio 7 5 6 6 0
Oklahoma 28 29 30 28 2
Oregon 16 19 16 17 -1
Pennsylvania 17 16 15 15 0
Rhode Island 42 42 42 42 0
South Carolina 36 35 35 36 -1
South Dakota 15 14 21 18 3
Tennessee 35 34 34 33 1
Texas 34 36 36 37 -1
Utah 8 8 7 7 0
Vermont 49 49 49 49 0
Virginia 24 22 27 26 1
Washington 18 17 18 20 -2
West Virginia 10 10 9 9 0
Wisconsin 20 20 17 16 1
Wyoming 43 43 39 35 4
District of Columbia 49 49 50 50 0

Observe: A rank of 1 is greatest, 50 is worst. All scores are for fiscal years. DC’s rating and rank don’t have an effect on different states.

Supply: Tax Basis.

To be taught extra about how we decided these rankings, learn our full methodology.

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