Rhode Island has fallen to the bottom ten states in the nation for business tax competitiveness, according to an analysis of the Tax Foundation’s 2023 Business Tax Climate Index by the Rhode Island Public Expenditure Council (RIPEC). The state ranked 42nd highest (ninth worst) in the nation, a drop from 40th place in 2022.

According to RIPEC President and CEO Michael DiBiase, Rhode Island’s lack of major tax reforms in recent years has contributed to the state’s decline in the Index. “As other states have enacted reforms to make their business tax systems more competitive in the last few years, Rhode Island has stood still,” DiBiase said.

The Business Tax Climate Index, published annually by the Tax Foundation, compares each state’s business tax climate by analyzing 125 variables across five major tax categories: individual income, sales, corporate income, property, and unemployment insurance tax. Rhode Island ranked in the bottom half of states for every tax category except sales tax (24th) and in the bottom ten states for property tax (41st) and unemployment insurance tax (49th).

In order to improve Rhode Island’s business tax competitiveness, RIPEC has recommended several priority areas for policymakers to consider. These include: improving the state’s property tax structure, making changes to the corporate income tax to make it more favorable to business, resisting calls to increase individual income tax rates for high wage earners, and pursuing reforms to make the unemployment insurance tax system fairer.

Rhode Island’s ranking in the Business Tax Climate Index has followed a generally positive trajectory between 2014 and 2019, improving from 44th best (or seventh-worst) in the country to 38th, before beginning to backslide over the past four years. In 2023, the state’s business tax climate was more competitive than Connecticut’s but less competitive than that of Maine, Massachusetts, and New Hampshire.

RIPEC’s full analysis of the Business Tax Climate Index is available on its website.


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Ryan Belmore is the Owner and Publisher of What'sUpNewp.  Belmore has been involved with What’sUpNewp since shortly after its launch in 2012, proudly leading it to be named Best Local News Blog in...