Despite enacting higher taxes in 2011, Connecticut did not budge from 40th on the Tax Foundation’s annual ranking of state business tax climates.
The study arrives in the wake of Gov. Dannel P. Malloy’s receipt of recommendations from a business tax policy task force he commissioned earlier this year, with the task force recommending several changes over a six-year period to simplify Connecticut’s business taxes with an eye on spurring job creation.
Connecticut continues to be hobbled by its dead-last ranking for property taxes as determined by the Washington, D.C.-based Tax Foundation, otherwise falling between 30th and 35th on sales, income, corporate and unemployment taxes. The Malloy task force did not address property taxes, on grounds it remains largely the jurisdiction of municipalities and not the state.
New Jersey ranked 49th and New York ranked 50th on the study, while Wyoming led the nation and New Hampshire was seventh to lead the Northeast.
“The lesson is simple: a state that raises sufficient revenue without one of the major taxes will, all things being equal, have an advantage over those states that levy every tax in the state tax collector’s arsenal,” stated Tax Foundation analysts Scott Drenkard and Joe Henchman, in a blog accompanying the report.
Among Connecticut’s other Northeast neighbors, Massachusetts placed 22nd and Rhode Island 46th. Maine, meanwhile, made the biggest gain in vaulting seven slots to 30th, after repealing its alternate minimum tax and changing its treatment of net operating losses.
