A recent report has revealed which states’ taxes are the most competitive relative to other states, based on those that impose the lowest rates while maintaining a structure that is simple and growth-friendly.

The Tax Foundation, in its 2026 State Tax Competitiveness Index, measured how well tax systems are structured on over 150 variables across corporate, income, sales, property and unemployment insurance taxes, and in terms of how these contribute to a state’s broadly defined economic success.

Why It Matters

As noted in the analysis, the index highlights features of a tax system that support or undermine the “competitiveness of a state’s business environment,” cutting scores for things like a complexity, non-neutrality and comparatively high rates. The Tax Foundation acknowledges tha

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