Texas Drops Out of List of Top 10 State Tax Climates

Beaten by Indiana

Texas for the first time dropped out of the nation's 10 best states for taxes on business, according to a report released today by the Tax Foundation's State Business Tax Climate Index.

Texas was No. 11, losing its No. 10 slot to Indiana.

"Texan tax policy has remained stagnant over the past few years, while Indiana has made notable improvements," explained Tax Foundation economist Scott Drenkard. "Although Texas' tax code has many good features, the component the state need to address the most is its problematic margin tax. Texas is one of only four states that levies this class of destructive business tax."

In addition to Texas, several other states have moved in the rankings since last year. Virginia and Kentucky both falling three places to No. 26 and No. 27, respectively. Kansas jumped six spots to No. 20.