Ohio has among the least business-friendly tax systems in the country, according to a Washington-based organization that monitors and analyzes tax policies.

The Tax Foundation’s annual State Business Tax Climate Index, released on Tuesday, Sept. 22, rated Ohio 47th among the 50 states — roughly the same ranking Ohio has received in the report annually since 2006.

South Dakota received the most business-friendly tax ranking in the latest report, followed by Wyoming. Trailing Ohio at the bottom were California and New York state, with New Jersey dead last, according to the nonprofit, nonpartisan organization’s assessment.

“The index measures how well a state’s tax system encourages investment by maintaining a broad tax base and low rates,” the Tax Foundation said in a statement accompanying its report.

The foundation said it ranks the states on the basis of corporate income, individual income, sales, property and unemployment insurance taxes. The “score” for each state is weighted based on the impact of a tax to a business, the foundation said.

The Ohio Department of Taxation doesn’t agree with the assessment, spokesman John Kohlstrand said.

Under Ohio tax reforms enacted in 2005, the state has eliminated the corporation franchise tax — levied on either a business’ net worth or net income — and replaced it with the commercial activity tax (CAT), levied on gross receipts, the revenue of a business, Kohlstrand noted. The Ohio Supreme Court upheld the CAT last week, rejecting a challenge by Ohio grocers.

The state also is phasing out personal property taxes on a company’s machinery, equipment and inventory, a levy that had been in effect since 1846.

In addition, Ohio is phasing in a 21 percent, across-the-board reduction in personal income taxes, which should be completely reflected in 2010 tax returns, Kohlstrand said. That, coupled with other state tax reforms in recent years, reduces the collective burden on Ohio taxpayers by $2.1 billion, he said.

The Tax Foundation’s report is available online at: www.taxfoundation.org