PROVIDENCE — Rhode Island moved up a notch in a national business tax survey released Wednesday, but it remains among the highest tax states in the country and that should continue to concern lawmakers and the governor, said the National Federation of Independent Business (NFIB).
“Rhode Island is in danger of letting its bad reputation solidify and that’s perilous for the state’s long-term outlook,” said NFIB State Director Bill Vernon. “The governor and lawmakers have worked to identify many of the factors that contribute to the problem but they need to do more to ‘move the needle’ and significantly improve the state’s standing.”
The nonpartisan Tax Foundation on Wednesday released its 2014 State Business Tax Climate survey, which moved Rhode Island up from 47th to 46th. Any improvement is good news, said Vernon, but the state clearly has a lot more work to do if it wants to be competitive.
“Many other states have moved aggressively to cut taxes in order to attract and support small businesses, and Rhode Island should be doing the same thing,” he said. “Except for New Hampshire, most of the region features very high taxes and that should be an opportunity for Rhode Island to distinguish itself to attract new investment.”
The Tax Foundation ranks states according to five categories. Rhode Island finished last for its unemployment insurance taxes, 46th for its property taxes and 43rd for its corporate taxes. For income taxes and sales taxes, it ranked 36th and 27th, respectively.
“Rhode Island doesn’t make the top 50 percent in any category, which explains why its reputation as a place for business remains in negative territory,” Vernon said. “Small business owners hope Rhode Island will at least begin to move to the middle of the pack when it comes to taxes and other costs of doing business so they can grow their businesses and create jobs.”
Connecticut ranked 42nd overall in the Tax Foundation’s index. It was 23rd for its unemployment insurance taxes, 49th for its property taxes and 35th for its corporate taxes.
For income taxes and sales taxes, it ranked 33rd and 32nd, respectively.
Wyoming, South Dakota and Nevada were the top three states in the survey; New York was last.