Illinois has ranked 36th in the Tax Foundation’s State Business Tax Climate Index, coming in at the same spot it ranked last year, according to an annual report.
The state’s overall ranking score is 4.75. Pertaining to corporate taxes, the state ranks 36th with a score of 4.63, and in individual taxes the state comes in 13th place with a score of 5.85. The state has dropped four spots to 38th in sales tax with a score of 4.26 and it dropped three spots in unemployment insurance taxes with a score of 4.49. In property taxes, the state ranks 48th, not moving up or down from last year, with a score of 3.63.
The index, the Tax Foundation says, allows business leaders and policymakers, as well as taxpayers, to see how each state compares. It also shows how well each state’s structure compares and provides an improvement map, the tax foundation reported.
When it comes to the individual income tax component, Illinois scores highly because it has a single, low tax rate in that area.
“Colorado, Illinois, Indiana, Kentucky, Massachusetts, Michigan, North Carolina, Pennsylvania, and Utah score highly because they have a single, low tax rate,” the foundation said in its annual report.
The foundation also reported that Illinois does well with sales tax on gasoline because it fully includes gasoline in its sales tax base.
The foundation also notes that the state had two major tax increases in 2011, which has resulted in its overall score.
"The individual income tax rate increased from 3 percent to 5 percent, and the corporate income tax rate rose from 7.3 percent to 9.5 percent,” the foundation said in the report. “The result was that many businesses threatened to leave the state, including some very high-profile Illinois companies such as Sears and the Chicago Mercantile Exchange."
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