KANSAS CITY, Mo. – Missouri placed 13th in 2022’s national Tax Foundation ranking of states’ business tax climates, falling two places behind where the state ranked in 2021, data shows.

This is the first time Missouri has seen a drop in its state business tax ratings in nearly six years, when it slipped from its 2015 ranking at 17th place, to 20th place by 2016.

In 2021, the state ranked 11th – Missouri’s best ranking since the Tax Foundation started compiling its business climate index in 2014.

The state outranks all its neighboring states for best state business tax, except for Tennessee, which placed eighth. 

As for some of its other neighbors, Illinois ranked 36th, marking no shift from last year, while Kansas jumped to 24th place, having been previously ranked 34th in the nation.

Iowa’s corporate tax ranking improved by eight places, from 46th last year, to 38th place this year. The state reduced its top corporate income tax from 12% to 9.8%, which was paid for through the repeal of corporate federal deductibility, according to Tax Foundation’s report.

This reform measure eliminated Iowa’s corporate alternative minimum tax, improving the state’s corporate ranking overall.

Missouri ranked better than most other states in corporate taxes, coming in third. The state ranked third place last year, as well.

As for sales tax, Missouri ranks 25th in the nation this year, slipping from its 2021 ranking of 24th. Nebraska, Kentucky and Iowa all rank better in sales tax than Missouri, with Kentucky ranking 13th, Nebraska ranking 14th, and Iowa ranking 15th.

Missouri ranks 21st nationwide for individual income tax and fourth among its border states, with Tennessee ranking in sixth place, Illinois ranking 13th, and Kentucky placing 17th.

As far as property tax goes, Missouri ranked 21st, a step down from its ranking of 20th last year.

Missouri also bumped up from seventh to fourth place for having the best unemployment insurance taxes of any other state in the nation, with border state Oklahoma taking the lead.

For more information on your state’s current tax climate, read the full report on Tax Foundation’s website.