Minnesota’s Economic News — W/E 9/24/21
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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|
|Corporate Income Tax||43||43||42||44|
|Individual Income Tax||45||46||46||46|
|Unemployment Insurance Tax||33||37||25||34|
|Minnesota Tax scores|
|Corporate Income Tax||4.41||4.21||4.20||4.33|
|Individual Income Tax||3.14||3.49||3.62||3.61|
|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.