Texas ranks 16th on unemployment insurance taxes

Texas finished 16th in a new study by the Tax Foundation that ranked which of the 50 states have the most business-friendly unemployment insurance tax structures.

The state’s ranking reflected a drop of four positions from its 2020 ranking, according to the foundation’s analysis, which is part of a wider study titled “2021 State Business Tax Climate Index.”

All states and the District of Columbia have unemployment insurance tax systems, which are federal-state programs that fund benefits to newly unemployed workers. Levies on employers fund the systems.

In the foundation’s analysis, those state tax systems that have low minimum and maximum rates, stick closely to the federal taxable pay levels ($7,000 in base pay), and don’t impose more surtaxes or additional benefits were rated the highest.

The Tax Foundation study rated the District of Columbia, but its ranking and score are separate from the 50 states.

Which States Have the Highest Unemployment Insurance Taxes?

State 2021 Rank
(1 Is Highest)
Change from 2020 to 2021 2020 Rank 2019 Rank 2018 Rank
Alabama 14 4 18 12 11
Alaska 45 1 46 35 25
Arizona 8 -2 6 13 15
Arkansas 23 0 23 34 32
California 21 1 22 17 13
Colorado 41 2 43 40 35
Connecticut 22 -1 21 23 19
Delaware 3 0 3 3 3
Florida 2 0 2 2 2
Georgia 39 0 39 38 38
Hawaii 25 3 28 26 27
Idaho 48 0 48 48 46
Illinois 43 -3 40 42 42
Indiana 27 -2 25 11 10
Iowa 37 -2 35 33 34
Kansas 13 1 14 15 12
Kentucky 49 0 49 47 47
Louisiana 4 0 4 4 4
Maine 33 -1 32 24 44
Maryland 34 -1 33 28 24
Massachusetts 50 0 50 50 49
Michigan 18 -1 17 49 48
Minnesota 32 2 34 25 37
Mississippi 5 0 5 5 5
Missouri 7 2 9 8 7
Montana 20 0 20 21 20
Nebraska 11 0 11 9 9
Nevada 47 0 47 45 45
New Hampshire 44 1 45 44 43
New Jersey 31 -1 30 32 36
New Mexico 9 -1 8 10 16
New York 38 0 38 31 30
North Carolina 10 0 10 7 6
North Dakota 12 1 13 14 14
Ohio 6 1 7 6 8
Oklahoma 1 0 1 1 1
Oregon 36 0 36 37 31
Pennsylvania 40 2 42 46 50
Rhode Island 30 1 31 29 23
South Carolina 24 2 26 27 29
South Dakota 42 2 44 39 39
Tennessee 26 -2 24 22 22
Texas 16 -4 12 18 26
Utah 17 -2 15 16 21
Vermont 15 1 16 20 18
Virginia 46 -5 41 43 41
Washington 19 0 19 19 17
West Virginia 28 1 29 30 28
Wisconsin 35 2 37 41 40
Wyoming 29 -2 27 36 33
District of Columbia 37 -2 35 33 30

Source: Tax Foundation

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