Washington moved up three spots in our 50-state Opportunity Washington Scorecard rankings last week, climbing from 25th to 22nd on the strength of improved scores in our Achieve (education) and Connect (transportation) priorities. Today, we’re taking a closer look at our Employ (economic vitality) metrics.
In this latest update, our ranking remains at No. 21, reflecting Washington’s persistently high cost of doing business. (Click for a better look at the table.)
Digging into the data underlying the overall Employ score, we find Washington ranks 17th (near the top third of all states) on the State Business Tax Climate rankings published by the Tax Foundation. The Tax Foundation ranking system tends to reward states without an income tax. It also dings Washington for its Business and Occupation (B&O) tax, which is imposed on gross receipts, rather than profits.
Also included in our metrics is a straightforward calculation of business tax burdens produced by the Council of State Taxation. COST finds that Washington imposes the nation’s 3rd highest state and local business tax burden per employee. This high cost tax ranking offsets the positive bump Washington gets from the Tax Foundation ranking.
We have marked progress in the unemployment insurance tax burden, following reforms enacted in 2011. Yet UI taxes here remain relatively high, contributing to our middling Employ score.
Watch for our next update to see how we measure up.