(The Center Square) – For the fifth consecutive year, New York is dead last among 50 states in competitive taxes as judged by the Tax Foundation’s analysis.
Policymakers, taxpayers, and business leaders can gauge tax systems state-to-state in many ways, including through the 2026 State Tax Competitiveness Index. It compares more than 150 variables in five major areas: corporate taxes; individual income taxes; sales and excise taxes; property and wealth taxes; and unemployment insurance taxes.
The state was last out of the cellar in 2021, ranking No. 48.
New York’s best category is corporate taxes at No. 28. It is 42nd in sales taxes; 38th in unemployment insurance taxes; 47th in property taxes; and 50th in individual income taxes.
Property taxes are better than a year ago by one spot, unemployment insurance taxes are down one, and the remainder are unchanged.
In its analysis, the foundation says the state has high rates and a burdensome and highly non-neutral tax structure.
“To a significant degree, the draw of New York, and particularly New York City, has been enough to attract and retain individuals despite a high-rate, poorly structured tax code, just as many people choose to live in the city despite its high cost of living generally,” the report says in its analysis. “At the margin, however, taxes matter – and in an era of enhanced migration, they now matter more than ever.”
The top individual income tax rate is 10.9%, the progressive income tax rate of 3.876%, and the corporate tax rates of 6.5% to 7.25%.
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“Convenience of the employer” rules mean remote employees of firms headquartered in New York can be taxed in another state and New York unless the other state has an allowance.
New York is the worst of the nine-state Northeast as defined by the U.S. Census Bureau and of the three Middle Atlantic states.
