The nonprofit Tax Foundation publishes a ranking of state tax codes each year. It was previously called the State Business Fiscal Climate Index, but this year it was rebranded as the State Fiscal Competitiveness Index.

North Carolina actually dropped one spot on the list this year, from No. 11 last year, because of “significant structural reforms” in other states, the foundation said.

However, the group praised North Carolina’s reduction of the flat individual income tax from 4.75 percent to 4.5 percent.

The Old North State boasts #3 for corporate taxes and #7 for unemployment insurance.

“Taxes paid by companies should be everyone’s concern because they are ultimately borne by individuals through lower wages, higher prices and decreased shareholder value,” the foundation said. “States do not institute fiscal policy in a vacuum. Each change in a state’s tax system makes the business tax climate more or less competitive compared to other states and makes the state more or less attractive to business.”

Along with incentives, state and local governments across the state have attracted dozens of new business opportunities. The tax changes are anchored by Republican majorities in the General Assembly.

Overall, Wyoming and South Dakota top the new list of states with the best tax codes, with New York and New Jersey the worst.

“The lack of a major tax is a common factor among many of the top 10 states,” the report said. “Property taxes and unemployment insurance taxes are levied in every state, but there are several states that do without one or more of the major taxes: the corporate tax, the individual income tax, or the sales tax.”

States at the bottom of the list have “complex, non-neutral taxes with relatively high rates,” the foundation said.

“New Jersey, for example, is burdened with some of the highest property tax burdens in the country, has the highest corporate income tax in the country, and has one of the highest individual income taxes,” it said. “Furthermore, the state has particularly aggressive treatment of international income, levies an inheritance tax and maintains some of the worst structured personal income taxes in the nation.”

A strong tax code can help a state be economically successful, the foundation said.

“A well-structured tax code will not make the Wyoming Basin a metropolis, nor will a weak tax structure make Manhattan a ghost town,” the group said. “But the fiscal structure plays a role in a state’s economic successes or failures, and often a substantial one. Every state can benefit from a simple, neutral, transparent, growth-friendly fiscal structure.”

The report highlights states that have improved their tax codes and moved up the rankings.

Arkansas, for example, moved up two spots on the list, from 38th to 36th, because it dropped its marginal corporate income tax rate from 5.1% to 4.3% and the highest marginal rate of individual income tax from 4.7% to 3.9%, according to the foundation. said.

Georgia climbed six spots to 26th, with changes including replacing a graduated individual income tax with a top rate of 5.75 percent with a flat tax structure with a rate of 5.39 percent.

“Taxes are not everything, but they matter and are under the control of policymakers,” the foundation concluded. “Even within a given revenue goal, there are better and worse ways to grow revenue.”