California Has One of the Worst Tax Climates in the Country

 Posted on October 02, 2014 in Taxation Law

A new study ranks California at close to the bottom of the heap for its tax laws. According to the poll by the State Business Tax Climate Index from the Tax Foundation, California has the 48th best tax climate out of the 50 states.

The State Business Tax Climate Index for 2015 measures the structure of the tax code of each state, taking into account a number of variables. Those variables include sales tax, property tax, income tax and employment insurance. States that had overly complicated, complex, and convoluted tax codes were ranked low on the list. States that had neutral and transparent tax codes fared much better on the list.

It should be no surprise to any California tax lawyer that the state is ranked at the bottom of the heap. The state ranked very poorly in a number of variables. It was ranked 48th for its overall business tax climate, and 34th for its corporate tax structure. It was ranked right at the bottom at number 50 for individual income tax structure, and at number 40 for sales tax structure. It fared slightly better when it came to property tax structure and unemployment insurance tax structure, gaining a position of number 14 for each of these variables.

The only two states that performed worse than California on the index were New Jersey, and New York. The most competitive tax codes in the country are to be found in the state of Wyoming, which ranked at number one, followed by South Dakota, Nevada, Alaska, Florida, Montana, New Hampshire, Indiana, Utah and Texas.

It's not just California's convoluted tax code, but also the higher taxes here that merited the state's dismal ranking in the list. The state has some of the highest taxes in the country.