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. This is two positions down from 2019 when the state was ranked 43rd. Long-term, Minnesota has generally ranked among the worst 10 states for business taxation. This is mainly due to high corporate 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. Rhode Island and Ohio, for example, 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, major efforts will have to be directed to reducing the overall tax burden on companies and individuals through rate cuts.