For the seventh consecutive year, Wyoming has been ranked the top state in the nation by a tax policy group for its business tax climate.
However, a member of the Legislature’s Revenue Committee said he is not sure the high ranking translates into new business for the state.
“It obviously is great to get an A-plus on a paper, but it doesn’t necessarily mean you’re the smartest person around,” said Sen. Ogden Driskill, R-Devils Tower. “It doesn’t equate to anybody coming here.”
The rankings by the Tax Foundation is based on the taxes in place in various states. The highest ranking states had fewer of what the group called “major taxes,” such as corporate income taxes, individual income taxes and sales taxes.
Wyoming fared well because it has no income tax, a well structured sales tax and modest excise taxes, which the Foundation said would make the state more attractive for economic development.
“Taxation is inevitable, but the specifics of a state’s tax structure matter greatly,” Jared Walczak, vice president of state projects for the Tax Foundation, said in a news release. “States with more competitive tax systems score well in the index, because they are best suited to generate economic growth.”
Wyoming ranked first in the nation in the area of personal and corporate income taxes because it has none.
For sales taxes, the state ranked sixth overall, while it was ranked 39th for property taxes.
Neighboring states also did well in the overall rankings, with South Dakota placing second, Montana placing fifth and Utah placing eighth.
New Jersey, with some of the country’s highest property taxes and second-highest corporate and individual income tax rates in the country, placed last.
However, Driskill noted that since Wyoming first topped the Tax Foundation’s rankings, the state’s tax structure has not helped the state lure new business as much as it should have.
“We might ace the test, but we’re not really passing,” he said. “The states with the best business climates are the ones attracting business. And that’s sure not Wyoming. We’re not even competing against our surrounding states.”
The state needs to take a hard look at itself to determine what changes are needed to bring in businesses, Driskill added.
“We might have what looks good on paper, but in fact, when you get here, you find we’re a much more regulatory state than it might look like we are,” he said. “We need to reassess what we are doing.”