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Best and Worst States for Property Taxes

by Vicki Robins, November 2012

 

In the newly released State Business Tax Climate Index for 2012-2013, the Tax Foundation documents the best and worst states for real and personal property taxes.

 

The Best...

 

  • New Mexico

  • Idaho

  • Utah

  • North Dakota

  • Arizona

The Worst...

 

  • Connecticut

  • New Jersey

  • Vermont

  • Massachusetts

  • Rhode Island

 


 

 

Property Tax Component of the State Business Tax Climate Index, 2012–2013

 

Property taxes are perceived as one of the most unfair of all state and local taxes. Businesses are keenly aware of this strong negative perception because property taxes must be paid regardless of profits. The unfairness is compounded because the tax rate on commercial and industrial property is often higher than the rate on comparable residential property.

 

The Tax Foundation found the best-ranked states generally have low rates of property tax, whether measured per capita or as a percentage of income. The states ranked as the worst generally have high property tax rates and also levy several wealth-based taxes.

 

Here are the rankings for 2012 and 2013.

 

State

2012 Rank

2013 Rank

Alabama 

8

8

Alaska 

13

13

Arizona 

5

5

Arkansas 

18

19

California 

17

17

Colorado 

9

9

Connecticut 

50

50

Delaware 

14

14

Florida 

24

25

Georgia 

30

30

Hawaii 

15

15

Idaho 

2

2

Illinois 

44

44

Indiana 

11

11

Iowa

37

37

Kansas

28

28

Kentucky 

19

18

Louisiana 

23

23

Maine 

39

39

Maryland 

40

40

Massachusetts 

47

47

Michigan 

31

31

Minnesota 

26

26

Mississippi 

29

29

Missouri 

6

6

Montana

7

7

Nebraska 

38

38

Nevada 

16

16

New Hampshire 

42

43

New Jersey 

49

49

New Mexico 

1

1

New York 

45

45

North Carolina 

36

36

North Dakota 

4

4

Ohio 

34

34

Oklahoma 

12

12

Oregon 

10

10

Pennsylvania 

43

42

Rhode Island 

46

46

South Carolina 

21

21

South Dakota 

20

20

Tennessee 

41

41

Texas 

32

32

Utah 

3

3

Vermont 

48

48

Virginia 

27

27

Washington 

22

22

West Virginia 

25

24

Wisconsin 

33

33

Wyoming 

35

35

Dist. of Columbia 

48

48

 

Note: A rank of 1 is more favorable for business than a rank of 50. All scores are for fiscal years. D.C. rank does not affect other states.


Source: The Tax Foundation