Montana has the 20th best structured Unemployment Insurance (UI) tax in the nation, according to the Tax Foundation in its examination of the five major components of the 2020 State Business Tax Climate Index. Montana has hovered at about the same level over the past four years.

The states with the best-scoring UI tax systems are Oklahoma, Florida, Delaware, Louisiana, Mississippi, and Arizona. The worst are Massachusetts, Kentucky, Idaho, Nevada, Alaska, and New Hampshire.

Unemployment insurance is a joint federal-state social insurance program that finances benefits for recently unemployed workers through taxes on employers. State UI tax systems are often quite complex, using variable-rate structures that impose different rates depending on how well-established a business is, its layoff history, and the health of the state’s UI trust fund, among other factors. All 50 states and the District of Columbia levy UI taxes, but some states structure their systems better than others.


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