PROVIDENCE – Rhode Island has the seventh-least “business-friendly” tax system of the 50 states, according to annual rankings released Tuesday by The Tax Foundation, a nonpartisan research group that promotes low tax rates.

The study “measures the competitiveness of the 50 states’ tax systems and ranks them accordingly based on the taxes that matter most to businesses and business investment: corporate income, individual income, sales, property and unemployment insurance taxes,” according to the organization.

Rhode Island moved up two rankings, from 46th to 44rd, in the annual report. Massachusetts ranked 36th, eight spots ahead of Rhode Island, while Connecticut ranked 38th.

Rhode Island’s ranking was dragged down by poor showings in the property and unemployment insurance tax categories as well as below-median rankings for corporate and individual income taxes. The state’s sales tax burden ranked higher.

The Tax Foundation said South Dakota has the most “business-friendly” tax system in the country based on its metrics, followed by Wyoming, Alaska, Nevada, Florida, Montana, New Hampshire, Delaware, Washington and Utah.

New Jersey’s tax regime was ranked the least “business-friendly,” followed by New York, California, Ohio, Iowa, Maryland, Rhode Island, Minnesota, Wisconsin and Vermont.

“When policymakers are considering tax changes in their states, they should remember two rules: Taxes matter to business, and states do not enact tax changes – increases or cuts – in a vacuum,” Kail Padgitt, the study’s author, said in a statement.

The methodology used by The Tax Foundation for its much-quoted rankings has come in for fierce criticism in Rhode Island and elsewhere over the years. The group argues that despite some limitations, its measurements offer a useful tool for policymakers, citizens and the press.

Additional information is available at TaxFoundation.org.