Colorado ranks 17th among the 50 states in the latest comparison of how tax systems affect businesses.
Colorado fared well in the comparison for lower corporate, individual and property taxes, but less so for sales taxes and unemployment insurance.
The Tax Foundation — a nonprofit, nonpartisan tax research organization based in Washington, D.C. — compiles the State Business Tax Climate Index to compare states for the competitiveness of their tax codes. The index takes into account a total of more than 120 variables in five major areas of taxation: corporate and individual income taxes, property and sales taxes and unemployment insurance.
Colorado scored 5.3 to slip one spot to 17th overall in the 2020 State Business Tax Climate Index. Since 2014, Colorado has ranked among the top 20 states.
For 2020, Colorado ranked the highest at seventh for corporate taxes and 14th for individual taxes and property taxes. Colorado ranked lower at 37th for its sales tax structure and 43rd for its unemployment insurance structure.
Wyoming remained the most competitive state overall in the 2020 index, a ranking it has held for seven straight years. Wyoming also ranked first in the 2020 index in imposing no individual or corporate income taxes and sixth for sales taxes.
South Dakota moved up a spot to second in the 2020 index. South Dakota also imposes no individual or corporate income taxes.
Alaska fell one stop to third, followed by Florida and Montana. Alaska imposes no individual income or state-level sales taxes. Florida imposes no individual income tax. Montana imposes no sales tax.
New Jersey remained dead last at 50th in the 2020 index, followed by New York, California, Connecticut and Arkansas.