There are a lot of good reasons to operate a business in Colorado, not the least of which is the opportunity to work and live in a state this beautiful. The halcyon days of fall with their crisp mornings, warm afternoons and changing foliage only serve to drive home the point.
But as a more practical matter, add a comparatively better tax climate to the list.
Colorado ranks 16th among the 50 states in the latest results of an annual analysis of how taxes affect businesses. Colorado held its spot in the State Business Tax Climate Index for 2017 on the strength of its property and income tax structures and overall tax climate.
Calculated each year by the Tax Foundation in Washington, D.C., 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.
Colorado ranked highest at 14th for property taxes, but also fared comparatively well at 16th for individual income taxes and overall tax climate and 18th for corporate income taxes. Colorado ranked lower at 39th for sales tax and 42nd for unemployment insurance.
That’s not to say the tax climate couldn’t be even better. Consider that Wyoming and South Dakota, the top two states in the index, impose no corporate or individual income taxes. Third-ranked Alaska levies no individual income or state-level sales taxes. How does that sound?
But things could be worse. Just contemplate operating a business in California, New York or New Jersey — which not only impose higher tax rates, but also do so under complicated systems.
Of course, taxes don’t constitute the only — or even primary — reason business owners operate their ventures in Colorado. Neither does the scenery nor fine fall days. But isn’t it nice the seasonal weather and tax climate can be attractive?