Illinois has the 31st best tax climate in the U.S. according to the latest edition of the State Business Tax Climate Index, released this morning by the nonpartisan Tax Foundation. The Prairie State’s rank has dropped two places from its 29th place ranking last October.
The Index, now in its 11th edition, measures how well structured each state’s code is by analyzing over 100 tax variables in five different categories: corporate, individual income, sales, property, and unemployment insurance taxes. States are punished for overly complex, burdensome, and economically harmful tax codes but are rewarded for transparent and neutral tax codes that do not distort business decisions. A state’s ranking can rise or fall significantly not only because of its own actions, but also because of changes or reforms made in other states.
The breakdown of Illinois’s ranking this year is as follows (1st is best, 50th is worst):
- Illinois’s overall State Business Tax Climate ranking: 31st
- Corporate tax structure: 47th
- Individual income tax structure: 11th
- Sales tax structure: 34th
- Property tax structure: 44th
- Unemployment insurance tax structure: 38th
“The federal government is gridlocked, but state policymakers on both sides of the aisle are enacting truly fundamental reforms,” said Tax Foundation Economist and Manager of State Projects Scott Drenkard. “States are doing their part and it’s time that Washington steps up.”