2011 State Business Tax Climate

For the second year in a row, South Dakota is ranked 1st in the Tax Foundation’s 2011 State Business Tax Climate Index; followed by Alaska and Wyoming.  New York has the worst state business tax climate with Minnesota (43rd) and Iowa (45th) also in the bottom 10.  The eighth edition of the Index, released Tuesday, represents the tax climate of each state as of July 1, 2010, the start of FY 2011.  This report illustrates why my commitment to protecting our low-tax and business friendly climate is so important.  Click here for the complete report.

The report validates principles that South Dakotans have believed in for decades—“Taxes matter to business; and states do not enact tax changes (increases or cuts) in a vacuum.”  South Dakota’s 4% sales and use tax reflects the report’s standard – “Good state tax systems levy low, flat rates on the broadest bases possible, and they treat all taxpayers the same.”  They emphasized a critical point to consider especially in today’s budgetary situation-- “State lawmakers are always mindful of their states' business tax climates but they are often tempted to lure business with lucrative tax incentives and subsidies instead of broad-based tax reform. A far more effective approach is to systematically improve the business tax climate for the long term so as to improve the state's competitiveness.”  (Padgitt, 2011 State Business Tax Climate Index)