Colorado ranks 18th among the 50 states in the latest results of an annual analysis of how taxes affect businesses.
Colorado moved up two spots in the State Business Tax Climate Index for 2016 on the strength of comparatively low corporate and individual income tax rates.
The Tax Foundation — a nonprofit, nonpartisan tax research organization based in Washington, D.C. — compiles the index to compare state tax systems and how well states structure those systems.
The index takes into account a total of more than 100 variables in five major areas of taxation: corporate and individual income taxes, property tax, sales tax and unemployment insurance tax. Those variables are used to calculate overall scores for states and, in turn, rankings.
Colorado scored a 5.33, but moved up in the rankings despite a slightly higher score than the year before. Colorado ranked 20th in 2015 and 2014 and 19th in 2013. Colorado came in 10th in 2008.
For 2016, Colorado ranked highest at 12th for property taxes, but also fared comparatively well at 15th for corporate income taxes and 16th for individual income taxes. Colorado ranked lower at 35th for unemployment taxes and 44th for sales taxes.
Wyoming remained the top-ranked state in the 2016 index, while South Dakota maintained its second-place ranking. Alaska and Florida each moved up one spot to third and fourth, respectively. Nevada dropped two spots to fifth.
Wyoming, South Dakota, Nevada and Texas impose no corporate or individual income taxes. Alaska levies no individual income or state-level sales taxes.
The bottom five spots in the rankings remained unchanged with Vermont in 46th, followed by Minnesota, California, New York and New Jersey dead last at 50th. Those states impose comparatively high tax rates under complex systems.