New Hampshire Gubernatorial Candidate Highlights State Business Tax Climate Index

March 04, 2010

In New Hampshire, former health commissioner John Stephen yesterday announced his candidacy for governor. In his announcement speech, he stated his opposition to the state's recent extension of the corporate income tax to limited liability companies (LLCs).

At the risk of oversimplifying, LLCs are partnerships that enjoy liability protection, and their income is typically taxed as part of the individual income tax. New Hampshire's action is a way to tax individual income while professing that they don't have an individual income tax.

The Concord Monitor notes Stephen's reference to our State Business Tax Climate Index, with a subsequent correction:

Stephen said the foundation ranked New Hampshire as the last state in the nation in business tax climate. A report on the foundation's website ranks New Hampshire as seventh-best in that category.

Greg Moore, a spokesman for Stephen, said the candidate misspoke about New Hampshire's business climate yesterday. He said Stephen was referring to the state's corporate tax index rate, which the Tax Foundation ranks as last in the country. The foundation combines that score with other state tax rankings in putting New Hampshire among the top 10 states in overall business tax climate.

Correct. The State Business Tax Climate Index has an overall rank, and five subranks for corporate taxes, individual income taxes, sales taxes, property taxes, and unemployment insurance taxes. While New Hampshire has the 7th best business tax climate overall, its corporate subindex is 50th, or worst in the country, primarily due to its terrible corporate tax base.

More on New Hampshire here.

More on state tax policy here.

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