How Competitive Are Your State’s Taxes?

Which states are most competitive on taxes? And which are the least?

The Tax Foundation has its own answers in its 2025 State Tax Competitiveness Index, which is based on an analysis of state tax structures. The study looked at five types of taxes: corporate, individual, sales, property and unemployment insurance. States without a certain tax are ranked equally as number 1 in that category.

The ranking is part of the Tax Foundation’s publication Facts & Figures 2025: How Does Your State Compare? and uses figures as of July 2024.

The list makes clear that no one region of the country has a lock on state tax competitiveness. In the overall ranking, Wyoming is 1, South Dakota is 2, Alaska is 3, and Florida is 4. However, the Northeast has some of the least-competitive states, including New York at 50 and New Jersey at 49.

What makes a winner in the tax competitiveness race? Top-ranked Wyoming, has no income tax or corporate income tax, and its sales tax is ranked seventh lowest in the country. Two other Wyoming taxes are far from the top: property (44) and unemployment insurance (31).

Conversely, bottom-ranked New York is ranked 50 for individual income tax, 47 for property tax, 42 for sales tax, 37 for unemployment insurance tax, and 28 for corporate tax.

Some states have highly disparate rankings in different categories. Eighth-ranked Tennessee ranks 1 in income tax because it does not have one. But it has one of the highest corporate income taxes, ranking 48, and its sales tax ranks 47.

The top 10 states for tax competitiveness are:

1. Wyoming
2. South Dakota
3. Alaska
4. Florida
5. Montana
6. New Hampshire
7. Texas
8. Tennessee
9. North Dakota
10. Indiana

The 10 lowest-ranked, (with 1. the bottom score) are:

1. New York
2. New Jersey
3. California
4. District of Columbia
5. Connecticut
6. Maryland
7. Washington
8. Minnesota
9. Vermont
10. Hawaii

For more information, visit the Tax Foundation.