FILE Cash register sales tax

New Hampshire finished first in a study by the Tax Foundation examining which states have the most business-friendly sales tax structures.

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

A state’s tax on goods and services can hurt the business climate if the levy applies to business inputs such as machinery and raw materials and if the rate causes consumers to alter their shopping patterns, according to the foundation.

The best sales tax structure occurs when it applies broadly to end products and services that are purchased by consumers and when rates are low and minimize market distortions, the study says.

The highest-scoring states in the analysis were New Hampshire, Delaware, Montana, Oregon, and Alaska – all of which do not levy a tax sales.

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How Do States Measure Up on Sales Taxes?

State2018 Rank2019 RankRank Change from 2018 to 2019
New Hampshire211
Delaware12-1
Montana330
Oregon440
Alaska550
Wyoming660
Maine871
Wisconsin78-1
Nebraska990
Virginia11101
Michigan12111
Indiana1012-2
Massachusetts13130
Kentucky14140
Vermont16151
Utah17161
West Virginia1517-2
Maryland18180
Iowa19190
North Carolina20200
Pennsylvania21210
Florida22220
Rhode Island23230
Hawaii26242
Missouri2425-1
Idaho27261
Minnesota2527-2
Ohio30282
Georgia29290
Connecticut2830-2
Kansas31310
North Dakota32320
South Dakota34331
South Carolina3334-1
Mississippi38353
Illinois3536-1
Texas37370
Colorado39381
Oklahoma3639-3
Nevada42402
New Mexico4041-1
New York43421
California4143-2
Arkansas44440
New Jersey46451
Tennessee4546-1
Arizona47470
Alabama48480
Washington49490
Louisiana50500

Source: Tax Foundation