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Maryland retained its dismal 41st ranking on the Tax Foundation’s State Business Tax Climate Index.
The Tax Foundation writes that it’s rankings “enables business leaders, government policymakers, and taxpayers to gauge how their states’ tax systems compare.”
While Maryland ranks 8th in sales tax and 15th in corporate tax , the state ranks near the bottom (46th) for individual income tax (46th), 40th for unemployment insurance tax, and 41st for property tax.
The poor individual income tax ranking stands out as a sore thumb for Maryland’s business climate because as the Tax Foundation has shown the state’s high individual income tax has a disproportionate effect on small businesses. According to their research as many of Maryland’s small firms are pass through entities where the owners pay the individual income tax rates, and face the 7th highest marginal tax rates in the nation.
Maryland has lost 6,500 small businesses since 2007 according to research from the grassroots citizens group Change Maryland.
Maryland ranks second in the nation, according to the foundation, for income tax revenue as a percentage of state and local tax revenue.
Wyoming took the top spot in the index, while New York came in last.
Tags: business climate, Maryland, Maryland Taxes
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