2022 State Business Tax Climate Index with a map showing states’ rankings on the Index’s sales and excise tax component.
The sales tax rate and structure can make a state more or less attractive to businesses for two key reasons:
- Some states apply the sales tax to business inputs, which drives up the costs of production.
- As sales tax rates increase, consumers may cut back on purchases or move their shopping to lower-tax jurisdictions.
The states that are most in need of sales tax reform, according to our Index, are Alabama, Washington, Louisiana, California, and Tennessee.
Source Tax Foundation
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