The State Tax Competitiveness Rankings 2027 place Wyoming first with a score of 7.70, followed by South Dakota at 7.56 and Alaska at 6.89, while New York ranks last at 3.66 among all 50 states. The Tax Foundation released the index on November 5, 2026, and it grades tax systems as they stood on July 1, 2026 across 159 variables.
State Tax Competitiveness Rankings 2027 – Introduction
The State Tax Competitiveness Rankings 2027 show which states build the most business-friendly tax codes. The Tax Foundation scores every state from 0 to 10 across five areas: corporate taxes, individual income taxes, sales and excise taxes, property and wealth taxes, and unemployment insurance taxes. Wyoming, South Dakota and Alaska hold the top three spots. New York, California and New Jersey sit at the bottom.
This report covers all 50 states. It lists the top ten, the middle of the pack and the bottom ten. It then breaks out corporate taxes, individual income taxes, sales taxes and property taxes, and tracks the biggest movers since 2026. Every number comes from the Tax Foundation. Where this report does its own math, it says so.
Interesting Facts on State Tax Competitiveness Rankings 2027
TOP 5 STATES BY OVERALL SCORE, 2027 INDEX (scale 0-10) Wyoming | ██████████████████████████ 7.7 S. Dakota | █████████████████████████ 7.56 Alaska | ███████████████████████ 6.89 Florida | ██████████████████████ 6.71 Texas | ████████████████████ 6.12
| Fact | 2027 Data |
|---|---|
| Release date | November 5, 2026 |
| Snapshot date for tax laws | July 1, 2026 |
| Best overall state | Wyoming (7.70) |
| Worst overall state | New York (3.66) |
| Variables measured | 159 |
| Heaviest component weight | Individual income taxes (30.2%) |
| States with no corporate or individual income tax | 2 (South Dakota, Wyoming) |
| Biggest riser | Louisiana (+9 places, to 23rd) |
| Biggest faller | Michigan (-9 places, to 25th) |
| New top 10 states | Missouri (9th), Utah (10th) |
Source: Tax Foundation, 2027 State Tax Competitiveness Index (November 2026).
Wyoming leads with 7.70 and New York trails with 3.66, a spread of 4.04 points. The index weighs individual income taxes at 30.2%, sales taxes at 21.7%, corporate taxes at 21.3%, property taxes at 15.2% and unemployment insurance taxes at 11.6%. Heavier weights go to areas where states differ most. South Dakota and Wyoming skip both the corporate and individual income tax.
Missouri and Utah entered the top ten at 9th and 10th, replacing Idaho and North Dakota. Louisiana jumped 9 places and Michigan fell 9. The snapshot date matters. Laws that take effect after July 1, 2026, such as Washington’s tax on income above $1 million, do not count until later editions.
Top 10 States in the State Tax Competitiveness Rankings 2027
TOP 10 STATES, OVERALL SCORE 2027 Wyoming | ██████████████████████████ 7.7 South Dako | █████████████████████████ 7.56 Alaska | ███████████████████████ 6.89 Florida | ██████████████████████ 6.71 Texas | ████████████████████ 6.12 New Hampsh | ████████████████████ 6.11 Montana | ████████████████████ 6.05 Tennessee | ████████████████████ 5.99 Missouri | ███████████████████ 5.66 Utah | ███████████████████ 5.61
| Rank | State | Score | 2026 Rank | Change |
|---|---|---|---|---|
| 1 | Wyoming | 7.70 | 1 | 0 |
| 2 | South Dakota | 7.56 | 2 | 0 |
| 3 | Alaska | 6.89 | 3 | 0 |
| 4 | Florida | 6.71 | 4 | 0 |
| 5 | Texas | 6.12 | 7 | +2 |
| 6 | New Hampshire | 6.11 | 6 | 0 |
| 7 | Montana | 6.05 | 5 | -2 |
| 8 | Tennessee | 5.99 | 8 | 0 |
| 9 | Missouri | 5.66 | 12 | +3 |
| 10 | Utah | 5.61 | 15 | +5 |
Source: Tax Foundation, 2027 State Tax Competitiveness Index (November 2026); changes calculated for this report.
Wyoming scores 7.70 and South Dakota 7.56, a gap of only 0.14. Alaska (6.89) and Florida (6.71) hold 3rd and 4th. All four kept their 2026 ranks. Texas climbed from 7th to 5th at 6.12. New Hampshire stayed 6th at 6.11, and Tennessee stayed 8th at 5.99. Montana slipped from 5th to 7th at 6.05.
Missouri rose from 12th to 9th at 5.66, and Utah rose from 15th to 10th at 5.61. Both levy every major tax, so their scores come from moderate rates and clean tax bases. The gap between 1st and 10th is 2.09 points. Five of the top ten states have no individual income tax.
Overall Tax Competitiveness Rankings 2027 | States Ranked 11th to 40th
SAMPLE OF MIDDLE-TIER SCORES, 2027 (every fifth state shown) 11 North | ███████████████████ 5.6 15 Oklaho | ██████████████████ 5.48 20 Wiscon | ██████████████████ 5.33 25 Michig | █████████████████ 5.21 30 Pennsy | █████████████████ 5.04 35 Alabam | ████████████████ 4.87 40 Maine | ███████████████ 4.59
| Rank | State | Score | Rank | State | Score |
|---|---|---|---|---|---|
| 11 | North Carolina | 5.60 | 26 | Kentucky | 5.20 |
| 12 | North Dakota | 5.57 | 27 | Mississippi | 5.19 |
| 13 | Idaho | 5.57 | 28 | New Mexico | 5.12 |
| 14 | Indiana | 5.51 | 29 | West Virginia | 5.09 |
| 15 | Oklahoma | 5.48 | 30 | Pennsylvania | 5.04 |
| 16 | Nebraska | 5.39 | 31 | Virginia | 5.02 |
| 17 | Arizona | 5.37 | 32 | Arkansas | 5.01 |
| 18 | Iowa | 5.35 | 33 | Colorado | 5.00 |
| 19 | Kansas | 5.34 | 34 | South Carolina | 4.99 |
| 20 | Wisconsin | 5.33 | 35 | Alabama | 4.87 |
| 21 | Nevada | 5.31 | 36 | Ohio | 4.85 |
| 22 | Delaware | 5.30 | 37 | Oregon | 4.79 |
| 23 | Louisiana | 5.26 | 38 | Illinois | 4.68 |
| 24 | Georgia | 5.26 | 39 | Rhode Island | 4.62 |
| 25 | Michigan | 5.21 | 40 | Maine | 4.59 |
Source: Tax Foundation, 2027 State Tax Competitiveness Index (November 2026).
North Carolina leads this group at 5.60, and Maine closes it at 4.59. That is a spread of 1.01 points across 30 states. North Dakota and Idaho both score 5.57 at 12th and 13th. Louisiana and Georgia both score 5.26 at 23rd and 24th. Indiana through Michigan, 14th to 25th, fit inside 0.30 points.
Scores drop faster below 34th. South Carolina holds 34th at 4.99, then Alabama falls to 4.87 at 35th. Ohio is 36th at 4.85, Oregon 37th at 4.79 and Illinois 38th at 4.68. Rhode Island scores 4.62 and Maine 4.59. Small policy changes can move a state several places here.
Worst 10 States for Tax Competitiveness 2027 | Bottom Rankings
BOTTOM 10 STATES, OVERALL SCORE 2027 Minnesota | ███████████████ 4.49 Vermont | ███████████████ 4.44 Hawaii | ███████████████ 4.39 Maryland | ██████████████ 4.35 Massachuse | ██████████████ 4.34 Connecticu | ██████████████ 4.28 Washington | ██████████████ 4.1 New Jersey | █████████████ 3.92 California | █████████████ 3.9 New York | ████████████ 3.66
| Rank | State | Score | 2026 Rank | Change |
|---|---|---|---|---|
| 41 | Minnesota | 4.49 | 43 | +2 |
| 42 | Vermont | 4.44 | 41 | -1 |
| 43 | Hawaii | 4.39 | 42 | -1 |
| 44 | Maryland | 4.35 | 45 | +1 |
| 45 | Massachusetts | 4.34 | 44 | -1 |
| 46 | Connecticut | 4.28 | 47 | +1 |
| 47 | Washington | 4.10 | 46 | -1 |
| 48 | New Jersey | 3.92 | 49 | +1 |
| 49 | California | 3.90 | 48 | -1 |
| 50 | New York | 3.66 | 50 | 0 |
Source: Tax Foundation, 2027 State Tax Competitiveness Index (November 2026); changes calculated for this report.
New York ranks 50th at 3.66, down from 3.79 in 2026. California is 49th at 3.90 and New Jersey 48th at 3.92. Washington fell from 46th to 47th at 4.10. Connecticut rose from 47th to 46th at 4.28. Massachusetts, Maryland and Hawaii score between 4.34 and 4.39. Minnesota is the best of the group at 4.49.
The gap from Minnesota to New York is 0.83 points. New Jersey has the highest corporate rate in the country at 11.5% and some of the heaviest property taxes. Washington’s sales tax now covers digital advertising, which pushed its sales tax rank to 50th. Minnesota, Connecticut and New Jersey each gained one or two places.
Corporate Tax Rankings by State 2027 | Best and Worst Corporate Tax Climates
CORPORATE TAX COMPONENT SCORE, 2027 (scale 0-10) Wyoming | ████████████████████ 10.0 South Dako | ████████████████████ 10.0 Missouri | ████████████ 6.17 North Caro | ████████████ 5.97 Oklahoma | ████████████ 5.95 Texas | ████████ 4.13 Washington | ████████ 3.9 Tennessee | ███████ 3.44 Oregon | █████ 2.36 Delaware | ███ 1.33
| State | Corporate Rank | Corporate Score | Overall Rank |
|---|---|---|---|
| Wyoming | 1 | 10.00 | 1 |
| South Dakota | 1 | 10.00 | 2 |
| Missouri | 3 | 6.17 | 9 |
| North Carolina | 4 | 5.97 | 11 |
| Oklahoma | 5 | 5.95 | 15 |
| Texas | 46 | 4.13 | 5 |
| Washington | 47 | 3.90 | 47 |
| Tennessee | 48 | 3.44 | 8 |
| Oregon | 49 | 2.36 | 37 |
| Delaware | 50 | 1.33 | 22 |
Source: Tax Foundation, 2027 State Tax Competitiveness Index (November 2026).
Wyoming and South Dakota tie for 1st with a perfect 10.00 because neither levies a corporate income tax or a gross receipts tax. Missouri ranks 3rd at 6.17. North Carolina ranks 4th at 5.97 with the lowest corporate rate among taxing states at 2.0%. Oklahoma ranks 5th at 5.95 with a 4% rate. North Carolina plans a 1% rate in 2028 and full repeal in 2030.
Delaware ranks last at 1.33. Oregon scores 2.36, Tennessee 3.44, Washington 3.90 and Texas 4.13. Most of these states lean on gross receipts style taxes. The overall column shows how much other taxes can offset weak corporate scores. Tennessee ranks 8th overall and Texas 5th. New Jersey (11.5%), Minnesota (9.8%) and Illinois (9.5%) carry the highest top corporate rates.
Individual Income Tax Rankings by State 2027 | Rates, Brackets & Overall Impact
INDIVIDUAL INCOME TAX RANK, 2027 (1 = best, 50 = worst) Texas | █████████████████████████ 1 Illinois | ████████████████████ 11 Nebraska | ███████████████████ 13 Oklahoma | ██████████████████ 15 North Carolina | ████████████████ 19 Ohio | █████████ 33 Maine | ████ 42 Hawaii | ██ 46 Washington | ████████ 36 New York | █ 50
| State | Individual Income Tax Rank | Overall Rank | Notable Fact |
|---|---|---|---|
| Texas | 1 | 5 | No individual income tax |
| Illinois | 11 | 38 | Strong income tax rank, weak elsewhere |
| Nebraska | 13 | 16 | Top rate cut from 5.2% to 4.55% |
| Oklahoma | 15 | 15 | Top rate cut from 4.75% to 4.5% |
| North Carolina | 19 | 11 | Rate cut from 4.25% to 3.99% |
| Ohio | 33 | 36 | Flat 2.75% rate adopted |
| Maine | 42 | 40 | Top rate now 9.15% over $1 million |
| Hawaii | 46 | 43 | New 13% bracket starts 2027 |
| Washington | 36 | 47 | 9.9% tax on income above $1 million starts 2028 |
| New York | 50 | 50 | Last on both measures |
Source: Tax Foundation, 2027 State Tax Competitiveness Index (November 2026).
Six states tie for 1st on this component: Alaska, Florida, South Dakota, Tennessee, Texas and Wyoming. Illinois ranks 11th on individual income taxes but 38th overall, so other taxes drag it down. Nebraska, Oklahoma and North Carolina cut rates and rank 13th, 15th and 19th. Ohio moved to a flat 2.75% rate and improved from 38th to 33rd.
Maine ranks 42nd after adding a 2% high-income surcharge, which sets its top rate at 9.15%. Hawaii ranks 46th and adds a 13% bracket in 2027. Washington ranks 36th now, but its 9.9% tax on income above $1 million starts in 2028 and will pull its score down. New York ranks 50th on both individual income taxes and overall.
Sales Tax and Property Tax Rankings by State 2027 | Best and Worst States
SALES TAX RANK VS PROPERTY TAX RANK, 2027 (1 = best) New Hampshire | sales 1 | property 44 Delaware | sales 2 | property 3 Montana | sales 3 | property 20 Idaho | sales 8 | property 1 New Mexico | sales 46 | property 2 Louisiana | sales 49 | property 14 Washington | sales 50 | property 18 Vermont | sales 29 | property 50 Connecticut | sales 20 | property 49 New York | sales 39 | property 47
| State | Sales Tax Rank | Property Tax Rank | Overall Rank |
|---|---|---|---|
| New Hampshire | 1 | 44 | 6 |
| Delaware | 2 | 3 | 22 |
| Montana | 3 | 20 | 7 |
| Idaho | 8 | 1 | 13 |
| New Mexico | 46 | 2 | 28 |
| Louisiana | 49 | 14 | 23 |
| Washington | 50 | 18 | 47 |
| Vermont | 29 | 50 | 42 |
| Connecticut | 20 | 49 | 46 |
| New York | 39 | 47 | 50 |
Source: Tax Foundation, 2027 State Tax Competitiveness Index (November 2026).
New Hampshire ranks 1st on sales taxes, followed by Delaware (2nd), Montana (3rd) and Idaho (8th). Washington ranks 50th, Louisiana 49th and New Mexico 46th. Sales rank alone does not decide the outcome. New Hampshire ranks 44th on property taxes yet finishes 6th overall. Montana ranks 20th on property and 7th overall.
Idaho ranks 1st on property taxes, New Mexico 2nd and Delaware 3rd. Vermont ranks 50th, Connecticut 49th and New York 47th. Louisiana repealed its capital stock tax and gained 17 places on property taxes, to 14th. Washington, at 18th on property, still finishes 47th overall because its sales tax rank is last.
Biggest Movers in State Tax Competitiveness Rankings 2027 | Winners and Losers
PLACES GAINED (+) OR LOST (-) IN OVERALL RANK, 2027 VS 2026 Louisiana | +++++++++ +9 Nebraska | ++++++++ +8 West Virginia | ++++++ +6 Utah | +++++ +5 Kansas | ++++ +4 Oklahoma | ++++ +4 Michigan | --------- -9 Maine | ------- -7 Georgia | ------ -6 South Carolina | ------ -6
| State | 2026 Rank | 2027 Rank | Change | Main Driver |
|---|---|---|---|---|
| Louisiana | 32 | 23 | +9 | Capital stock tax repealed |
| Nebraska | 24 | 16 | +8 | Income tax rates cut |
| West Virginia | 35 | 29 | +6 | Expensing conformity |
| Utah | 15 | 10 | +5 | Expensing conformity, rate cuts |
| Kansas | 23 | 19 | +4 | Rolling federal conformity |
| Oklahoma | 19 | 15 | +4 | Six brackets cut to three |
| Michigan | 16 | 25 | -9 | No expensing conformity |
| Maine | 33 | 40 | -7 | 2% high-income surcharge |
| Georgia | 18 | 24 | -6 | Lower corporate score |
| South Carolina | 28 | 34 | -6 | Lagged conformity |
Source: Tax Foundation, 2027 State Tax Competitiveness Index (November 2026); changes calculated for this report.
Louisiana gained 9 places, from 32nd to 23rd, after repealing its capital stock tax. Nebraska gained 8 by cutting income tax rates. West Virginia gained 6, Utah 5, and Kansas and Oklahoma 4 each. Most risers matched federal business expensing rules or cut rates. Oklahoma moved from six brackets to three.
Michigan lost 9 places, from 16th to 25th, after it skipped expensing conformity and added exemptions for tips and overtime. Maine lost 7. Georgia and South Carolina lost 6 each, and Idaho and Virginia lost 4 each. Missouri skipped the tip and overtime exemptions, which kept its income tax base wide.
State Tax Changes Coming After the 2027 Index | What Will Move Rankings
SCHEDULED TAX CHANGES BY EFFECTIVE YEAR 2027 | Hawaii, Illinois, New Mexico, Utah, Rhode Island (phase starts), N. Carolina 2028 | Washington, Rhode Island (second step), N. Carolina corporate rate to 1% 2029 | Rhode Island top rate reaches 8.99% 2030 | N. Carolina corporate tax repeal planned
| State | Scheduled Change | Takes Effect |
|---|---|---|
| Washington | 9.9% tax on income above $1 million | 2028 |
| Hawaii | 13% bracket above $500,000 | 2027 |
| Rhode Island | Surtax lifts top rate from 5.99% to 8.99% | 2027-2029 |
| Illinois | Digital asset tax, targeted advertising tax, social media fee | Jan. 1, 2027 |
| North Carolina | Individual rate to 3.49%, then 2.99% | 2027-2028 |
| New Mexico | Decouples from expensing rules, adds NCTI to base | Jan. 1, 2027 |
| Utah | Targeted advertising tax | Jan. 2027 |
Source: Tax Foundation, 2027 State Tax Competitiveness Index (November 2026).
Washington, Hawaii and Rhode Island all add high-income taxes. Washington’s 9.9% rate starts in 2028 and faces likely legal challenges. Hawaii’s 13% bracket applies above $500,000, or $1 million for married filers. Rhode Island’s top rate steps up from 5.99% to 6.99% in 2027, then 7.99% in 2028 and 8.99% in 2029.
Illinois, Utah and New Mexico add or widen business taxes on January 1, 2027. North Carolina moves the other way. Its individual rate falls to 3.49% in 2027 and 2.99% in 2028, and its corporate rate drops to 1% in 2028. Repeal is planned for 2030. These shifts will show up in the 2028 edition.
State Tax Competitiveness Rankings 2027 – Frequently Asked Questions
Which State Has the Best Tax Competitiveness Ranking in 2027?
Wyoming ranks 1st with a score of 7.70. South Dakota is 2nd at 7.56 and Alaska is 3rd at 6.89.
Which State Has the Worst Tax Competitiveness Ranking in 2027?
New York ranks 50th at 3.66. California is 49th at 3.90, New Jersey 48th at 3.92, Washington 47th at 4.10 and Connecticut 46th at 4.28.
What Are the Top 10 States for Tax Competitiveness in 2027?
They are Wyoming, South Dakota, Alaska, Florida, Texas, New Hampshire, Montana, Tennessee, Missouri and Utah, in that order.
What Is the State Tax Competitiveness Index in 2027?
It is a Tax Foundation ranking of how well each state structures its tax code. It scores 159 variables across five components on a 0 to 10 scale. The scale is relative, so 0 means worst among the 50 states.
Does the 2027 Index Measure Total Tax Burden?
No. It grades tax structure, meaning rates, bases and rules. It does not measure how much tax residents pay overall.
Which States Have No Individual Income Tax in the 2027 Rankings?
Alaska, Florida, South Dakota, Tennessee, Texas and Wyoming tie for 1st on the individual income tax component.
Which State Has the Lowest Corporate Tax Rate in 2027?
South Dakota and Wyoming levy no corporate income tax. Among states that do, North Carolina has the lowest rate at 2.0%. Missouri and Oklahoma follow at 4%.
Which State Improved the Most in the 2027 Rankings?
Louisiana rose 9 places, from 32nd to 23rd. Nebraska rose 8 places, from 24th to 16th.
Why Did Michigan Fall in the 2027 Tax Rankings?
Michigan dropped 9 places, from 16th to 25th. It did not conform to the improved federal expensing rules, added an exemption for tipped and overtime income, and has a low Section 179 limit.
Where Does Texas Rank in the 2027 Tax Rankings?
Texas ranks 5th overall at 6.12. It ranks 1st on individual income taxes but 46th on corporate taxes because of its margin tax.
Where Does California Rank in the 2027 Tax Rankings?
California ranks 49th overall at 3.90. It ranks 49th on individual income taxes, 47th on sales taxes and 39th on corporate taxes.
Does Washington’s Millionaires Tax Affect the 2027 Rankings?
No. The 9.9% tax on income above $1 million starts in 2028, after the July 1, 2026 snapshot date. Washington ranks 47th in the 2027 edition.
Disclaimer: This research report is compiled from publicly available sources. While reasonable efforts have been made to ensure accuracy, no representation or warranty, express or implied, is given as to the completeness or reliability of the information. We accept no liability for any errors, omissions, losses, or damages of any kind arising from the use of this report.