Business climate study is a mixed bag for N.H.

When it comes to taxes, state ranks high and low

New Hampshire had the eighth-best business tax climate in the country last year, but the third worst tax on corporations.

Yes, you’ve read that right. And the numbers aren’t from dueling reports, but the same report: The Tax Foundation’s 2014 edition of the State Business Tax Climate Index, released Wednesday.

It gets even more confusing because of dueling press releases that simplified the findings. The Tax Foundation put New Hampshire on the top, while Americans for Prosperity-New Hampshire – eager to talk about the state’s “poor job creation climate” – says the foundation’s report puts the state at the bottom.

The good news – the state’s great business tax climate ranking – is actually a composite of five weighted categories, of which corporate taxes, mainly the business profit tax and business enterprise tax, accounts for just one.

In New Hampshire’s favor is that the report gives the most weight – 32.4 percent and 21.5 percent, respectively – to whether or not a state has an income or sales tax.

In those two categories, unlike the others, New Hampshire stands out more, whereas in the other categories, it doesn’t deviate much from the average state.

When it comes to sales taxes, the Granite State is the best in the nation, outdoing other states because it has lower rates on such items as gas, cigarettes and beer.

The state ranks ninth when it comes to personal income tax, because the state does have an interest and dividends tax, which other income tax-free states don’t.

That’s where the good news ends. When it comes to corporate taxes – weighted at 20.2 percent – the state ranks 48th, the same as last year. After all, most states don’t grab 8.5 percent of a company’s profits.

Ditto when it comes the lower-weighted taxes, property tax and unemployment insurance tax.

To nobody's surprise, New Hampshire ranks 42nd when it comes to property tax. More surprising, perhaps, is that the state ranked 46th (fourth-worst in the nation) when it comes to unemployment taxes.