(The Center Square) – Wyoming ranks among the top states for businesses because it lacks an individual income tax, according to a new report.
The Cowboy State was ranked No. 1 by the Washington, D.C.-based Tax Foundation along with Alaska, Florida, South Dakota, which also don’t have an income tax.
Janelle Fritts, policy analyst for the Tax Foundation, said states that score well in its “State Business Tax Climate Index” often have things in common including a flat, low-rate income tax with few deductions and exemptions.
“They also tend to protect married taxpayers from being taxed more heavily when filing jointly than they would filing as two single individuals,” Fritts said.
The indexing of state brackets, deductions, and exemptions for inflation to escape unlegislated tax increases also helps a state perform better on the index. None of the states that scored as well as Wyoming have an individual income tax or payroll taxes besides unemployment insurance.
“Wyoming and other income tax-free states are leading the way in growth and opportunity,” Chris Cargill, president and CEO of Mountain States Policy Center, told The Center Square. “That policymakers stay true to keeping the state income tax free is one of the reasons why other states including Idaho and Montana continue to lower their rates.”
Neighboring Idaho ranked No. 19th and Montana ranked No. 24.
