Wyoming, South Dakota, and Nevada rank among the best business tax climates, while companies in New Jersey, New York, and California struggle with the worst tax codes in the county, according to the newest edition of the Tax Foundation’s annual State Business Tax Climate Index.

The report’s key findings include:

• The 10 most competitive states are: Wyoming (#1), South Dakota (#2), Nevada (#3), Alaska (#4), Florida (#5), Montana (#6), New Hampshire (#7), Indiana (#8), Utah (#9) and Texas (#10).
• The 10 least competitive states are: New Jersey (#50), New York (#49), California (#48), Minnesota (#47), Vermont (#46), Rhode Island (#45), Ohio (#44), Wisconsin (#43), Connecticut (#42), and Iowa (#41).
• The most notable ranking changes occurred in North Carolina, Nebraska, North Dakota, New York, Wisconsin, Maine, and Kansas (see state specific press releases for more details).

The report, now in its 11^th edition, measures how well structured each state’s code is by analyzing over 100 tax variables in five different categories: corporate, individual income, sales, property, and unemployment insurance taxes. States are punished for overly complex, burdensome, and economically harmful tax codes, but are rewarded for transparent and neutral tax codes that do not distort business decisions. A state’s ranking can rise or fall significantly based not just on its own actions, but on the changes or reforms made by other states.

Since the last edition, many states have experienced ranking changes largely because of the fundamental reforms made in a handful of states. The most exciting change occurred in North Carolina which experienced the largest rank improvement in the study’s history, jumping from 44^th to 16^th place due to a fundamental overhaul of state’s tax code. Nebraska, North Dakota, New York, and Wisconsin also improved their tax codes. Conversely, Maine was the only state that saw a significant drop in rank this year due to its increased state sales tax rate.

“The federal government is gridlocked, but state policymakers on both sides of the aisle are enacting truly fundamental reforms,” said Tax Foundation Economist and Manager of State Projects Scott Drenkard.  “States are doing their part and it’s time that Washington steps up.”

The goal of the State Business Tax Climate Index is to start a conversation between taxpayers and policymakers about how their states fare against the rest of the country. This report helps answer the questions: How well is your tax code structured? How competitive is your state compared to the rest of the county? Are businesses in your state spending too much time complying with onerous tax provisions? Are you double taxing things you shouldn’t?

Full Report: 2015 State Business Tax Climate Index