La. ranks poorly in business climate
Louisiana has once again been ranked poorly on a nationwide survey, this one is the 2019 State Business Tax Climate Index by the non-partisan Tax Foundation.
The state is among the worst 10 states in the United States in this survey at number 44. The only southern state ranking worse than Louisiana is Arkansas at 46.
Other states ranking poorly are New Jersey, 50; California, New York, 48; Connecticut, 47; Iowa, 45; Minnesota, 45; Ohio, 42; and Vermont, 41.
The top 10 states for business climate were: 1. Wyoming; 2. Alaska; 3. South Dakota; 4. Florida; 5. Montana; 6. New Hampshire; 7. Oregon; 8. Utah; 9. Nevada; and 10. Indiana.
Louisiana’s sub-category ranks are Corporate Tax rate, 36; Individual Tax Rank, 32; Sales Tax Rank, 50; Property Tax Rank, 32; and Unemployment Insurance Tax Rank, 4.
Sticking out like a sore thumb is Louisiana’s sales tax ranking, dead last. That as much as anything shows how wrong Louisiana’s taxing priorities are.
The report also notes that since this survey was done, Louisiana chose to keep part of a penny sales tax that was expiring. While the state rate declined from 5 to 4.45 percent, Louisiana’s combined average state and local sales tax rate remains the second highest in the nation at 9.46 percent.
In addition, the Tax Foundation cites Louisiana’s “exceedingly complex and uncompetitive sales tax structure is still ranked worst in the nation on the sales tax component of the Index.”
Another factor in Louisiana’s poor ranking is the number of brackets in Louisiana’s income tax. The Tax Foundation ranks states with a single-rate system as the best. Louisiana’s five brackets put it in the multi-bracket category, while Alaska’s 10 brackets is the worst.
Louisiana is also penalized for being one of 13 states that has deductibility of depletion. The state also scores poorly because it is among the states that impose high rates and taxing range for business inputs, such as utilities, services, manufacturing, and leases.
There many other criticisms of Louisiana business unfriendly taxing system in the report, which can be found in it entirety on the Tax Foundation web site, www.taxfoundation.com.
This editorial was written by a member of the American Press Editorial Board. Its content reflects the collaborative opinion of the Board, whose members include Crystal Stevenson, John Guidroz, and retired editor Jim Beam.