The Tax Foundation ranks Louisiana at 42nd on its latest State Business Tax Climate Index.

In what’s become something of an annual tradition, the Tax Foundation once again doesn’t think much of Louisiana’s business tax climate, ranking it 42nd on its 2022 State Business Tax Climate Index.

The ranking is unchanged from the last annual report and does not take into account tax changes lawmakers and voters approved this year, which may improve the state’s ranking a couple spots. 

The index from the Washington D.C. policy group is not based on how much states collect in taxes. Rather, it’s meant to show how well states structure their systems according to the Tax Foundation, which prefers simplicity, low rates and a broad base. The absence of a major type of tax is a common factor among many of the top 10 states. 

Louisiana ranked 34th for corporate taxes, 34th for individual taxes. 48th for sales taxes, 23rd for property taxes, and 5th for unemployment insurance taxes. 

The ranking does not reflect the recent passage of the tax swap voters approved by ratifying Constitutional Amendment 2, triggering lower personal and corporate income tax rates and removing constitutional protection for the deductibility of federal taxes. In a previous report, the foundation’s Janelle Cammenga says the tax overhaul would move the state’s ranking from 42nd to 38th, though that analysis also includes the sales tax simplification that voters rejected. 

Wyoming ranks first on the 2022 index and New Jersey ranks last. 

Daily Report reached out to Louisiana Economic Development for a reaction but did not receive one in time for publication. Staff with the Baton Rouge Area Chamber were unavailable for comment. For an explainer on what it all means, check out this piece from the Tax Foundation.

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