A recent report from the Tax Foundation, a conservative-leaning think tank based in Washington, D.C., rated Connecticut’s business climate as the fourth worst in the United States.
The 2024 State Business Tax Climate Index put the Nutmeg State in the bottom 10 states, which the report says “tend to have a number of afflictions in common: complex, nonneutral taxes with comparatively high rates.”
The report shows Connecticut among the states with the highest property tax collections per capita: New Jersey ($3,538), New York ($3,322), New Hampshire ($3,318), Connecticut ($3,288) and Vermont ($3,001).
States that fared well in terms of their per capita property tax collections were those with low effective tax rates. At the top of the list were Alabama (1.3%), and Tennessee and Arkansas (each at 1.7%).
Overall, only California, New York and New Jersey fared worse in the report. The study has ranked Connecticut No. 47 since 2014.
The best five states for business were Wyoming, South Dakota, Alaska, Florida and Montana, which share an “absence of a major tax” such as a corporate income tax, individual income tax and/or sales tax.
The Yankee Institute pointed out in a post Tuesday that every New England state ranked higher than Connecticut. New Hampshire placed near the top, as the No. 6 best state for business.
Others finished close behind Connecticut, with Maine at No. 34, Rhode Island at No. 41, Vermont at No. 43 and Massachseets at No. 46.
The Yankee Institute also noted that, compared to the 2023 report, Connecticut improved in the individual income tax category by moving up one spot. However, the state dropped by two and three spots in the corporate tax and unemployment insurance tax categories. It retained its ranking in the sales tax and property tax categories.
The report does not factor in the largest income tax in Connecticut history, which Gov. Ned Lamont signed in June.
