Annually, The Tax Foundation ranks the 50 states according to how friendly their tax climate is to businesses. A friendly tax climate can be especially beneficial in difficult economic times, like the present, by attracting new business to the state thereby creating economic and job growth. “Taxes matter to business. Business taxes affect business decisions, job creation and retention, plant location, competitiveness, the transparency of the tax system and the long-term health of a state’s economy,” advised The Tax Foundation. Too many Ohioans have experienced this first hand, while watching business expand or relocate to neighboring states with a friendlier tax climate. Unfortunately, Ohio has ranked at the bottom of this list for several years now.

The Tax Foundation ranked Ohio as the 46^th most friendly business tax climate for 2011; one spot up from its 2010 ranking. This has been the status quo for Ohio, as the state’s tax climate has ranked between 46^th and 48^th for each of the last 5 years. On a positive note, Ohio has been proactive in improving its tax climate by undertaking a five year phase-in of the Commercial Activity Tax, while phasing-out the Corporate Franchise, Personal Property and Individual Income Taxes. However, the legislature postponed the final phase-out of Ohio’s Individual Income Tax last year. Completion of this phase-out will further improve Ohio’s business tax climate ranking in the future.

Click here for The Tax Foundation’s entire rankings and report.