New York State has the third-worst tax climate for businesses in the country for the third year in a row, a nonpartisan think tank said Wednesday.

The Tax Foundation, in its annual review of tax policy, ranked New York 48th among the 50 states because of high taxes on personal income, property and purchases.

The foundation's State Business Tax Climate Index is closely followed by economic developers and commercial real estate officials because taxation is a key factor in where companies chose to locate and to expand operations and employment.

In the 2021 index, New Jersey had the nation’s worst tax climate, placing 50th — unchanged for seven years. California was again 49th, a position it has occupied for three years.

In terms of types of taxes, New York ranked 48th in levies on personal income, 45th in property taxes and 43rd in sales taxes, according to the foundation.

The Empire State fared better when it comes to corporate income taxes, placing 15th in the country. In 2014, the State Legislature and Gov. Andrew M. Cuomo agreed to lower the corporate tax rate over time, from 7.1% to 6.5%. Cuomo consulted with the Washington-based foundation on the corporate tax measure.

"New York’s taxes are among the nation’s highest and most complex, but reforms undertaken during the Cuomo administration have significantly improved the state’s corporate tax climate," Jared Walczak, index co-author and the foundation's state projects vice president, said on Wednesday.

He said he was concerned about proposals from some Democrats in the legislature to raise taxes on the wealthy and financial transactions to help close a huge budget deficit caused by the coronavirus pandemic.

Walczak said lawmakers "face a stark choice: build on past successes to develop a more competitive tax environment or double down on high, poorly structured taxes and complicate the state’s post-pandemic recovery."

Freeman Klopott, a spokesman for Cuomo’s Budget Division, said, "This administration has lowered income tax rates for every New Yorker, making it fairer for all, and implemented a permanent property tax cap…Changes to the state’s tax system must consider the impact on New York State’s ability to compete for jobs," he said.

The state is looking to Washington for help in closing an estimated $62 billion deficit over four years. "The federal government must act responsibly and deliver this funding so that New York can lead the national recovery as producer of 8% of the U.S. GDP," Klopott said, referring the gross domestic product, or the sum of all goods and service produced in the country.

Connecticut and Minnesota rounded out the bottom five in the foundation’s 2021 State Business Tax Climate Index. (Minnesota and Washington, D.C. tied for 46th).

Wyoming, which doesn’t tax personal and corporate income, continued to have the best tax climate for the eighth year in a row, the foundation said.


The Tax Foundation ranked the 50 states in terms of their business tax climate.

States with the lowest taxes


South Dakota



States with the highest taxes

New Jersey


New York


Minnesota & Washington, D.C.

SOURCE: Tax Foundation's 2021 State Business Tax Climate Index

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