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New Mexico Named Best State for
Business Property Taxes

by Vicki Robbins, November 2016

 

The Tax Foundation's annual State Business Tax Climate Index shows New Mexico leads the nation in the property tax component ranking for 2017. On the other end of the spectrum, New Jersey is ranked the worst state for property taxes.

 

The report notes that property taxes are a significant factor in business location decisions. Higher property taxes have a particularly strong negative effect on small businesses because they are paid regardless of profits and many startups are not profitable in their first few years.

 

Property taxes are important to businesses of all sizes because the tax rate on commercial property is often higher than the tax on comparable residential property. In addition, many localities and states levy taxes on the personal property owned by a business.

 

Keeping statewide property taxes low puts states in a better position to attract new business investment, according to the Tax Climate Index. States that maintain low effective rates and low collections per capital are more likely to promote growth than states with high rates and collections.

 

To read the full 2017 State Business Tax Climate Index, click here.

 

Best Property Tax States

Worst Property Tax States

1. New Mexico

50. New Jersey

2. Idaho

49. Connecticut

3. North Dekota

48. Vermont

4. Indiana

47. New York & District of Columbia (tie)

5. Utah

46. Illinois

6. Arizona

45. Massachusetts

7. Missouri

44. Rhode Island

8. Nevada

43. New Hampshire

9. Montana

42. Maryland

10. Florida

41. Maine

 

40. Iowa

* Source: Tax Foundation