The Tax Foundation has released its newly redesigned 2025 State Tax Competitiveness Index, ranking states based on corporate, individual income, sales, property, and unemployment insurance taxes. New Hampshire ranked sixth overall, with high scores in sales taxes but lower rankings in corporate and property taxes. The state’s decision to fully deduct interest expenses for businesses in the year incurred helped improve its corporate tax ranking. Texas, previously in the sixth spot, fell to seventh due to its low rankings in all other taxes except for individual income taxes.
Wyoming and South Dakota continued to dominate the top spots in corporate and individual income taxes, while Florida tied for first in individual income taxes. New Hampshire’s efforts to eliminate its Interest & Dividends Tax by January 2025 have been praised by the Tax Foundation, solidifying its competitive standing. To further improve tax competitiveness, the foundation recommends eliminating the I&D tax, adopting permanent full expensing, and improving the treatment of net operating loss carry forwards.
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