Analysis: New Hampshire ranks 9th best in state income tax study


New Hampshire finished ninth in a new study by the Tax Foundation ranking which states have the most business-friendly income tax structures.

The state’s ranking remained unchanged from its 2018 score, according to the foundation’s analysis, which is part of a wider study titled “2019 State Business Tax Climate Index.”

Forty-one states levy individual income taxes that are broad-based. The seven that do not are Alaska, Florida, South Dakota, Wyoming, Nevada, Texas and Washington. The two remaining states – Tennessee and New Hampshire – tax only investment income, such as interest and dividends.

Individual income tax rates concern business owners because states tax sole proprietorships and certain classes of businesses using their income tax codes, according to the foundation. States that scored well in the analysis either had no income tax or a flat tax with low rates, while states with highly progressive income tax systems and high rates received lower rankings, the study said.

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How Do States Measure Up on Individual Income Taxes?

State2018 Rank 2019 Rank Change from 2018 to 2019
Alaska1  1 0
Florida1  1 0
South Dakota1  1 0
Wyoming1  1 0
Nevada5  5 0
Texas6  6 0
Washington6  6 0
Tennessee8  8 0
New Hampshire9  9 0
Utah10  10 0
Massachusetts11  11 0
Michigan12  12 0
Illinois13  13 0
Colorado14  14 0
Indiana15  15 0
North Carolina16  16 0
Kentucky37  17 20
Pennsylvania17  18 -1
Arizona18  19 -1
North Dakota27  20 7
Kansas19  21 -2
Montana21  22 -1
Idaho23  23 0
Maine20  24 -4
Missouri32  25 7
Nebraska24  26 -2
Mississippi25  27 -2
West Virginia26  28 -2
Rhode Island30  29 1
Alabama28  30 -2
New Mexico29  31 -2
Louisiana22  32 -10
Oklahoma31  33 -2
South Carolina34  34 0
Virginia33  35 -2
Oregon36  36 0
Vermont43  37 6
Georgia35  38 -3
Wisconsin41  39 2
Arkansas39  40 -1
Delaware40  41 -1
Iowa42  42 0
Connecticut44  43 1
Ohio45  44 1
Maryland47  45 2
District of Columbia48  45 3
Minnesota46  46 0
Hawaii38  47 -9
New York49  48 1
California50  49 1
New Jersey48  50 -2
Source: Tax Foundation

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