Yesterday, the Tax Foundation revealed its 2020 rankings of state business climates, which places Louisiana towards the bottom.
The ranking is decided by many factors, ranging from how early Tax Freedom Day is celebrated annually to the residents' tax burden as a percentage of their income. A combination of these rankings was utilized to paint of picture of each state's business tax climate, mappinghowindividual state laws (whether corporate, individual income, sales, unemployment insurance or property taxes) can influence economic growth.
So what does being no. 41 mean? Louisiana is way less favorable for businesses.
The Tax Foundation's report ranks each individual state based on tax rates and collections per capita. When held in comparison to other states, Louisiana's sales tax rate and collections skyrocket. The Foundation did note that however, the property taxes were around the same as other states.
Additionally, Louisiana had some of the lowest rankings when it came to taxes on business climate, on gas, on liquor and property. Of course, Louisiana ranked high in other areas, such as combined state and local sales tax rates, and combined sales tax collections per capita. Yet, Louisiana's current sales tax rate ranks 38th in the nation, currently set at 4.45%, no longer tied with North Dakota and Wisconsin for 33rd.
The sales tax gatherings make up the majority of the state of Louisiana's revenue. The report examined Louisiana's sources of tax collection, explaining that the sales tax counts for nearly 43% of collections.
So what does this mean for the Louisiana business world?
Will we ever make it past no. 41?
Photo: New Orleans CBD from Algiers Point at Dusk, by MeRyan. Wikimedia Commons.