The Tax Foundation released its 2019 State Business Tax Climate Index. Originally co-created by Scott Moody and Wendy Warcholik (who are now OCPA research fellows) and now in its 14^th year, the index ranks each state based on how conducive its tax system is to economic growth. This report does not measure how much a state collects in taxes but rather how well the state structures its tax system.

Kentucky provides a perfect example of this as it saw the biggest jump, from 39 to 23, while enacting a revenue-raising tax reform. By simplifying its income tax structure, removing business tax credits, and broadening its sales tax base, Kentucky created a simpler and fairer tax system that also resulted in increased revenue.

The index ranks Oklahoma 26^th overall. This is Oklahoma’s worst ranking in the last four years and five spots lower than last year. Oklahoma fell in three of the five major categories: individual income tax, sales tax, and property tax. Oklahoma has its lowest rankings in the individual income tax and sales tax categories.

Despite falling in the rankings, Oklahoma continues to outpace some of our regional neighbors. Missouri moved ahead of Texas for the first time in four years, while Arkansas continues to hold the bottom spot among our regional states. Missouri ranks in the top half of each of the five categories, while Texas has an immense comparative advantage in the individual income tax by levying a rate of zero.

Below, you can see the change in national rank over the past four years amongst Oklahoma and our regional neighbors.