AUGUSTA, Maine — Maine has moved up seven spots in a national research group’s annual assessment of states’ tax climates for business.
The Tax Foundation ranked Maine 30th in its 2013 State Business Tax Climate Index, up from 37th in the foundation’s 2012 index.
The Tax Foundation ranking takes into account more than 100 factors, including corporate income tax, sales tax, unemployment insurance tax and property taxes, according to the foundation’s website. The Washington, D.C.-based foundation, which promotes tax-cutting policies, was founded in 1937 and has ties to some conservative-leaning organizations.
Maine’s improvement in the 2013 survey was a result of the elimination of the state’s alternative minimum tax for individuals as part of the current state budget and the expiration of a ban that prohibited businesses from carrying forward operating losses from one year to offset profits in future years, according to the Tax Foundation.
Wyoming took first place in the Tax Foundation survey, while New York was last. In New England, Maine’s ranking was third highest, behind New Hampshire (No. 7) and Massachusetts (No. 22) and ahead of Connecticut (No. 40), Rhode Island (No. 46) and Vermont (No. 47).
The Tax Foundation singled out Michigan for what it called the most dramatic movement in the index. The state jumped to 12th from 18th after eliminating the Michigan Business Tax and replacing it with a flat corporate tax rate.
In a news release, LePage welcomed the news and said he expected Maine to move up in the Tax Foundation’s 2014 index, when the survey reflects income tax changes that take effect Jan. 1, 2013. Those changes lower the top individual income tax rate to 7.95 percent from 8.5 percent and merge four tax rates into two.
“The reduction of the tax burden on residents and businesses will lead to more and better jobs in Maine,” LePage said in a statement. “By removing burdensome government regulations, the people of Maine will prosper again.”
For their part, Democrats called the Tax Foundation a group with a “conservative ideology.”
“The kind of tax cuts for the rich and corporations that they support have failed to create jobs nationally and here in Maine,” said Rep. Seth Berry of Bowdoinham, the ranking Democrat on the Legislature’s Taxation Committee.