Every year the Tax Foundation of the United States releases the State Business Tax Climate Index, ranking each state on tax friendliness, or in other words, how favorable state taxes are towards businesses. This ranking is based on 5 factors that vary in weight depending on the year. 

• -Individual Income Tax
• -Sales Tax 
• -Corporate Tax
• -Property Tax
• -Unemployment Insurance Tax

Here’s how the top 10 states (or lowest in taxing) were ranked.

Notice that Montana ranks 5th for 2023! Montana has hovered around the 5th and 6th place for this ranking for the past several years most likely due to its lack of sales tax (except in some resort areas) as well as steady corporate and individual tax rates. This low ranking is important when looking at owning and/or starting up a business. Taxing is a major part of a business’s revenue. The decision on where to open a business could depend on how much it will be taxed throughout its lifetime. 

Another crucial factor to add when looking at this Business Tax Ranking is how strong the economy is in terms of employment. Seen below are the increases and decreases in employment per state since the pandemic started. Montana has had more job increases than 3 of the other top 5 best tax-ranked states. This indicates that the economy is growing and is a healthier business environment than most other states. 

With all this being said, Montana is a sound and potentially profitable environment to open a business within the US. This could be your sign to bring that remote work to you! Set up shop here and add to this lively economy. I realize there are many other factors that go into the decision to open a business but make sure the tax structure of each state is on your radar before you do so. As always, please consult a tax professional before making any decisions.

Please enjoy your holiday season with laughter, friendship, health and all other things important to you!

Cheers,

-Dianne Click