Show-Me State tax climate ranks 16th in U.S.

Missouri's tax climate ranked 16th in the United States, according to the Tax Foundation’s 2014 State Business Tax Climate Index.

The figure puts the Show-Me State higher than 68 percent of the nation, ranking higher than seven of Missouri's bordering neighbors. Tennessee ranked 15th overall.

The climate index is based on a hierarchical structure built from five components: individual income tax, sales tax, corporate income tax, property tax and unemployment insurance tax. According to the report, the five components are measured on 100 variables and based on a weighted scale of importance, with individual income tax scores comprising 32.4 percent of the overall total.

Missouri took seventh place in both corporate tax and property tax rankings; ninth in unemployment insurance tax; 26th in sales tax; and 27th in individual income tax rankings.

“This independent report reaffirms Missouri’s status as a low-tax state with a stable and competitive climate for businesses to grow and invest,” Gov. Jay Nixon said in a news release.

Wyoming, South Dakota and Nevada made up the top three tax climate states in the nation. The absence of a major tax is a dominant factor in vaulting these states to the top of the rankings, according to the report. Property taxes and unemployment insurance taxes are levied in every state, but several states do not levy one or more of the major taxes including corporate tax, individual income or the sales taxes.

Coming in at No. 48 was California, followed by New Jersey and New York, rounding out the list at No. 50. According to the report, the states on the bottom of the list suffer from the same afflictions: complex, non-neutral taxes with comparatively high rates.

Founded in 1937, the Tax Foundation is a 501(c)(3) nonpartisan state and federal tax research group based in Washington, D.C.