North Carolina has vaulted from No. 44 to No. 16 in the latest ranking of state business tax climates compiled by the Tax Foundation, a conservative-leaning group in Washington,.
The improvement of 28 spots in the annual rankings is the largest jump in the 11 years that the organization has compiled its State Business Tax Climate Index.
The latest report cites the “historic tax reform passed in 2013 that fundamentally restructured the state’s tax code.” It also notes that “as the reform package continues to phase in, the state is projected to continue climbing the rankings.”
The rankings are based on an analysis of more than 100 variables in five areas of taxation: corporate, individual income, sales, property and unemployment insurance.
The sweeping tax cut passed by the Republican-led legislature ended the state’s three-tiered personal income tax rate, crating a flat tax of 5.8 percent in 2014 and 5.75 percent in 2015. The corporate tax rate fell from 6.9 percent previously to 6 percent this year and declines to 5 percent in 2015. Future decreases are dependent on the state meeting certain revenue targets.
Wyoming ranked first in this year’s index of business tax climates, followed by South Dakota and Nevada.
At the bottom of the rankings: New Jersey.