A nonprofit tax-research group in Washington released a study today that ranks Rhode Island dead last in the country for the state’s business tax climate.

Rhode Island is one of three New England states — the others being Vermont and Maine — that ranked as having among the “ten worst business tax climates,” according to The Tax Foundation.

Other states ranked at the bottom were New Jersey, which ranked 49th, New York, ranked 48th, and California, ranked 47th.

“We don’t argue that taxes are the only consideration when businesses chose where to locate,” said the Tax Foundation’s economist, Curtis Dubay. “But they are an important factor. They directly impact the profitability of companies … so businesses certainly take them under consideration” when deciding where to locate.

The Tax Foundation based its rankings on five taxes: corporate, individual income, sales, unemployment and property. Rhode Island ranked 50th, meaning that its taxes overall are higher than any other state in the country.

The rankings do not evaluate the overall business climate, which economic policy analysts say includes such variables as schools, roads and proximity to other markets.

Except for New Hampshire, which has no personal income tax, none of the other New England states made it into the top-10 best tax climates. New Hampshire ranked 7th nationally. Massachusetts, by contrast, ranked 34th and Connecticut ranked 38th.

Tax climate is also important because it’s related to a state’s overall economic health, said Dubay, the Tax Foundation’s economist. For example, Rhode Island also ranks 50th nationally in job creation from 2003 to 2006, he said, 42nd in production growth, and 48th in income growth. (The rankings, he said, are based on data from the U.S. Bureau of Labor Statistics and the Bureau of Economic Analysis.)

Rhode Island has consistently ranked at the bottom of the pack since the study was first conducted in 2003. (Rhode Island used to rank 49th until 2004, before dropping to 50th.)

“The governor has said … since he was first a candidate for this office that he believes Rhode Island’s high taxes were stifling the state’s ability to create jobs and grow the economy,” said Governor Carceiri’s spokesman, Jeff Neal. “We have made some small successes,” he said, such as reducing state income taxes for some residents and eliminating the automobile tax. “But … the only way that you can reduce taxes is to reduce spending.”

It is no surprise, Neal said, that the best rankings went to states such as Wyoming, South Dakota, Alaska and Texas, where oil production generates “significant” tax revenues.

The Tax Foundation study scores each of the five tax components separately, although some, such as income taxes and sales taxes, are weighted more heavily than others.

Of the five taxes measured, the worst individual score for Rhode Island was given to the state unemployment insurance tax and its property tax. Rhode Island’s unemployment insurance tax ranked 50th in the country in terms of business friendliness, while property taxes ranked 48th, according to the report. The unemployment tax, however, is given the least weight of all the taxes in the index.

The least onerous ranking was given to Rhode Island’s sales tax, which ranked 33rd in the nation. (The state’s individual income tax ranked 47th and its corporate tax ranked 34th.)

Some states have improved their rankings. Arizona now ranks 25th in the country, compared with 34th in 2003; North Dakota’s ranking also improved by 9 points during the last 5 years, to 30th today. And North Carolina went from 43rd in 2003 to 40th in the current fiscal year.

New York, which was dead-last four years ago, is now 48th.

Saul Kaplan, executive director of the Rhode Island Economic Development Corporation, said he had not seen the report yesterday, but issued a written statement that said: “Rhode Island must continue to improve its tax structure. Our tax position limits our competitiveness in attracting and retaining business and puts a heavy burden on our citizens. This report reminds us that we cannot resolve our current budget issues by raising taxes. We must create a tax climate that supports economic growth and work aggressively to raise the state’s top line revenue through private sector job growth.”

larditi@projo.com