The Small Business and Entrepreneurship Council is out with its annual business tax climate report. (Press release here and pretty cool interactive map here.) According to SBEC, Washington has the 5th best business tax system. SBEC constructs its index using 18 measures:

The 18 measures are: 1) state’s top personal income tax rate, 2) state’s top individual capital gains tax rate, 3) state’s top corporate income tax rate, 4) state’s top corporate capital gains tax rate, 5) any added income tax on S-Corporations, 6) whether or not the state imposes an alternative minimum tax on individuals, 7) whether or not the state imposes an alternative minimum tax on corporations, 8) whether or not the state’s personal income tax brackets are indexed for inflation, 9) property taxes, 10) consumption-based taxes (i.e., sales, gross receipts and excise taxes), 11) whether or not the state imposes a death tax, 12) unemployment taxes, 13) whether or not the state has a tax limitation mechanism, 14) whether or not the state imposes an Internet access tax, 15) “Amazon” taxes, 16) gas tax, 17) diesel tax, and 18) wireless taxes. (Boldface added.)

Notice anything? Eight of the measures relate to personal or corporate income taxes. We don’t have them, so of course we look pretty good. Here are SBEC’s “top 15” best states:

1) South Dakota, 2) Texas, 3) Nevada, 4) Wyoming, 5) Washington, 6) Florida, 7) Alaska, 8)Alabama, 9) Ohio, 10) Colorado, 11) Mississippi, 12) Michigan, 13) South Carolina, 14) Tennessee, and 15) Missouri.

The first seven listed have no income tax. We’ve written about this before, for example here and here.

As it happens, Washington voters seem to agree an income tax is a bad idea, too. Still, it would be a mistake to put too much emphasis on the state’s success in heavily skewed rankings like this one.