HELENA - Montana has the eighth best business tax climate in the U.S., a national study has concluded.

The Tax Foundation, a nonpartisan educational organization based in Washington, D.C., issues its rankings each year. Montana dropped a spot from seventh place in 2011 to eighth place in 2012.

"Montana does have a good tax climate," said Gov. Brian Schweitzer, a Democrat. "It's not new."

He said he believes Montana's tax rating should move up a notch or two next year because the study doesn't include a 2011 law that further reduces property taxes on certain business equipment.

"Montana has a good tax environment," Schweitzer said. "We have an eager and educated work force, and it's a high quality of life here. Those are things that attract businesses to invest."

Webb Brown, president of the Montana Chamber of Commerce, called the ranking "good for promotional purposes."

"Like always, we take those things with a grain, but we'll promote the heck out of it anyway," Brown said of state-by-state rankings. "We have made some good changes over the year."

Brown said the Tax Foundation gives a lot of credit in its rankings to states that don't have certain major taxes such as general sales taxes or individual income taxes, but doesn't look at the total tax burden on a business.

"Any savvy business will do their own homework and look at total tax burden," he said.

Wyoming topped the 2012 list with the best state business tax climate, followed by South Dakota, Nevada, Alaska, Florida, New Hampshire and Washington. Following Montana was Texas at ninth and Utah at 10th.

Many of the states ahead of Montana have experienced financial problems and may be looking to raise taxes, Schweitzer said.

"I think we're eighth and getting better," he said.

The report acknowledged that the absence of a major tax "is a dominant factor in vaulting many of these 10 states to the top of the rankings."

"Property taxes and unemployment insurance taxes are levied in every state, but there are several states that do without one or more of the major taxes: the corporate tax, the individual income tax or the sales tax," the Tax Foundation said.

The top three states - Wyoming, South Dakota and Nevada - each have no corporate or individual income tax.

Montana has no general sales tax, but levies certain selective sales taxes.

Besides looking at whether a state has a general sales tax, the foundation also evaluated state sales taxes on services, gasoline, groceries, gasoline and diesel excise taxes, tobacco and alcoholic beverages and beer excise taxes.

The Tax Foundation ranked Montana 15th best in the corporate tax category. The state's other rankings, by category, were: 20th in individual income taxes, third in sales taxes, 20th in unemployment insurance taxes and eighth best in property taxes.

The 56-page report may be found at www.tax


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