Michigan Ranks 14th for Business Tax Climate in U.S.

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The business tax climate of Michigan ranked 14th this year out of all 50 states, according to a report by the Tax Foundation, a nonpartisan research organization based in Washington. The state’s overall ranking remains unchanged from last year.

The 2014 State Business Tax Climate Index — which represents the tax climate of each state as of July 1, 2013, the first day of fiscal year 2014 — reports that Michigan made it into the top 10 for two different components of the rankings. It ranked seventh for sales tax and ninth for corporate tax.

Michigan scored in the bottom 10 in the category of unemployment insurance tax, where it ranked 44th. It also ranked 14th for individual income tax and 28th for property tax.

The data in the index is based on more than 100 tax provisions for each state and is synthesized into a single score. The states are then compared against each other, so that each state’s ranking is relative to actual policies in place in other states around the country.

As the report notes, the rankings are important to state lawmakers, who may be concerned about companies leaving their state for another that has more competitive taxes.

“The goal of the State Business Tax Climate Index is to start a conversation with policymakers about how their states fare against the rest of the country,” Scott Drenkard, an economist at the Tax Foundation, said in a statement. “With this report, we’re asking: ‘how well is your tax code structured? Are businesses in your state spending too much time complying with onerous tax provisions? Are you double taxing things you shouldn’t?’”

In 2014, the top five states are:

1. Wyoming
2. South Dakota
3. Nevada
4. Alaska
5. Florida.

The five lowest ranked states are:

46. Rhode Island
47. Minnesota
48. California
49. New Jersey
50. New York.

For a breakdown of the index’s results, download the PDF here

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