Report: Florida 5th in competitive taxes

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(The Center Square) – Tied for the top spot in individual income tax rank, Florida is fifth 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 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.

All states without an individual income tax tied for the top spot in the category. Alaska, New Hampshire, South Dakota, Tennessee, Texas and Wyoming are the others.

Florida is eighth in unemployment insurance taxes; 16th in sales taxes; 17th in corporate taxes; and 20th in property taxes. The overall rank is down one, as is the rank for corporate taxes, and property taxes is five worse than a year ago. Unemployment insurance taxes is up two spots and the other two categories are unchanged.

In its analysis, the foundation says the state does not tax capital stock.

“And,” the report adds, “its corporate income tax largely adheres to national norms, yielding a highly competitive overall tax code. However, the state falls short on its treatment of capital investment, only allowing corporate taxpayers to claim 15% of the first-year expensing of machinery and equipment offered under the federal tax code. With full expensing now permanent at the federal level, Florida should consider conforming to this provision of the federal tax code.”

The report notes rankings are for a snapshot look on July 1, and recognizes – though not reflected in the ranking as a result – Florida on Oct. 1 repealed a separate commercial lease tax.

Florida is No. 1 within the 16-state South as defined by the U.S. Census Bureau and of the eight South Atlantic states.