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5 Best and 5 Worst States for Tax Competitiveness

February 11, 2025

3 min Read

Written by Travis Woods

Edited by Chris Cluff

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For over 20 years, the Tax Foundation’s State Competitiveness Index has assessed the overall competitiveness of each of the 50 states by analyzing their individual tax codes and the complications therein. Doing so allows politicians, taxpayers and policymakers to compare the tax systems across America, gauge how they compare and thus find paths to improvement for all.

The Tax Foundation’s evaluation of each state creates a ranking, from best to worst, of each state. Those at the top frequently have major absenses in their tax code — no individual income tax, or sales tax or corporate income tax. Meanwhile, the states at the bottom of the list are commonly regarded as having overly complex tax codes at very high rates (compared to the rest of the country).

Find out whether your home state falls among the best or the worst.

Also see the income tax in every state.