Montana ranks fifth in having a favorable tax structure, in the recently released State Business Tax Climate Index, by the Tax Foundation.
The index rates how a state compares to the rest of the country in the structure of their tax system. Most interestingly, top ranking states in the index tend to be those that lack one kind of tax or another.
While Montana does not have a sales tax, Wyoming and South Dakota, ranking first and third, do not have a corporate tax or an income tax. Nor does Nevada which ranks ninth.
Alaska, ranked second, has no income tax, nor a statewide sales tax. Florida in fourth place has no income tax. Neither New Hampshire, in sixth place, nor Oregon, in seventh place, have a sales tax.
This does not mean, however, that a state cannot rank in the top 10 while still levying all the major taxes. Indiana (10th) and Utah (8th), levy all of the major tax types, but do so with low rates on broad bases.
The Foundation further states, the states in the bottom 10 tend to have a number of afflictions in common: complex, non-neutral taxes with comparatively high rates. New Jersey, for example, is hampered by some of the highest property tax burdens in the country, is one of just two states to levy both an inheritance tax and an estate tax, and maintains some of the worst-structured individual income taxes in the country.
In the bottom ten states are Vermont, Ohio, Minnesota, Louisiana, Iowa, Arkansas, Connecticut, New York, California, and New Jersey in 50th place.
Montana has held its fifth place position for four years. In fact all of the states in the top ten have remained in the top ten since at least 2016.
Montana ranked 22nd in the structure of its individual income tax, 12th in its corporate tax component, 3rd in its sales tax, 10th in property tax, and 21st in unemployment insurance tax.