According to the Tax Foundation’s 2018 State Business Tax Climate Index, Arizona ranked 21st for its tax competitiveness, an improvement of three spots from 2015, when it ranked 24th.
The Foundation’s annual index is designed to help business leaders, government policymakers, and taxpayers determine how their state’s tax system compares to others.
Here’s how Arizona rated on all metrics:
Overall rank: 21st
Corporate tax: 13th
Individual income tax: 18th
Sales tax: 47th
Unemployment insurance tax: 15th
Property tax: 6th
Neighboring New Mexico and California ranked 34th and 48th, respectively.
The study authors pointed out the results of Arizona’s corporate income tax rate helped.
“Arizona concluded a multiyear phasedown of its corporate income tax rate, bringing the rate from 5.5 to 4.9 percent in 2017,” the authors concluded. “Scheduled annual rate reductions began in 2015, and this year’s final reduction helped the state improve six places on the corporate income tax component, from 19th to 13th. The cuts have been aided by limitations on credits and other tax preferences, which have helped pay down rate reductions.”
