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Minnesota Still one of 10 Worst States for Business Taxation.

The Tax foundation has released its 2020 State Business Taxation Index and Minnesota is ranked 45th among the 50 states. The state is down from 43rd for 2019, and slightly better than 46th for 2017 and 2018. Minnesota has generally ranked among the worst 10 states for business taxation mainly due to high corporate income and individual income taxes.

There has been no significant change in tax scores or rankings for Minnesota.

Minnesota Tax Ranking
2017 2018 2019 2020
Overall Tax 46 46 43 45
Corporate Income Tax 43 43 42 44
Individual Income Tax 45 46 46 46
Sales Tax 25 25 27 28
Property Tax 28 28 31 26
Unemployment Insurance Tax 33 37 25 34

 

Minnesota Tax scores
2017 2018 2019 2020
Overall tax 4.19 4.31 4.37 4.35
Corporate Income Tax 4.41 4.21 4.20 4.33
Individual Income Tax 3.14 3.49 3.62 3.61
Sales Tax 4.82 4.80 4.76 4.63
Property tax 4.80 5.01 5.07 5.07
Unemployment Insurance Tax 4.87 4.73 4.89 4.78

There is a way out

Some states have been able to move up the Business Tax Index. For instance, Rhode Island and Ohio have made significant and gradual improvements in reducing their tax burdens. As of the 2020 Business Tax Index, these two states are no longer among the 10 worst Business Tax States.

Minnesota`s corporate and individual income taxes remain some of the highest in the nation. If there is going to be any improvement, efforts will have to be directed to reducing the overall tax burden on companies and individuals, either through efforts to lower tax rates, reduce the tax base or minimize tax compliance costs.

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