Kentucky, Idaho, Virginia and Maryland top the 50 states for fairness and balance in their tax structures, according to a new state tax "report card" issued today by a federal advisory board.

The report on "High-Quality State-Local Tax Systems" was presented at a conference here by the federal Advisory Commission on Intergovernmental Relations.

It ranks New Hampshire as the state with the most poorly balanced tax structure. Just above New Hampshire at the bottom of the list were Wyoming, South Dakota and Texas.

None of the four lowest-ranking states has a state income tax on wages or salaries. This was considered a serious shortcoming by the study's authors, who said the fairest and most well-balanced state-local tax structures divide the tax burden among income, sales and property taxes.

"The basic principle is that there is no ideal tax, so you want to diversify revenues fairly equally among the big three [taxes]," said commission Executive Director John Shannon, who compiled the report with commission analyst Robert J. Kleine.

Speaking before an overflow crowd of state legislators attending a seminar here on state tax reform, Shannon said his report cards for the 50 state tax structures are based on "fairly subjective criteria and the use of an admittedly arbitrary method . . . . "

He noted that different rating systems would produce different "best" states.

For example, Shannon said:

*"If the goal is attractiveness to high-income individuals and investors, the top state would be Texas, because it has neither an individual nor a corporate income tax."

*"If you want to rob from the rich and give to the poor, then the highest grade would go to Minnesota, which has the most progressive income tax of any state."

*"If you think that taxes should come from the most local branch of government, then you would favor New Hampshire. It relies almost completely on the local property tax."

*"If you like a state that shifts the tax burden away from its residents, then your top rank goes to Alaska, which collects its revenue from out-of-state energy companies."

Many legislators at the seminar noted that states are competing vigorously to devise tax codes that would reduce the burden on business and attract new industries to their states. But Shannon said efforts to produce a favorable business climate can skew tax systems, making them unfair to individuals.

Shannon's report rated Missouri, Tennessee and South Dakota as Nos. 1, 2 and 3, respectively, for a pro-business tax code. But, on the overall grade for balance and fairness, those states rated Nos. 14, 45 and 48, respectively.

The report ranked Virginia seventh in fostering a pro-business tax climate and No. 1 for fairness in its property-tax structure because of a high rate of uniformity among local jurisdictions. Overall, Virginia stood No. 3.

Maryland was rated 35th for business climate and 10th for property-tax fairness. The state received high scores for spreading its burden among the three forms of taxation and for fairness in broadening its tax base. Maryland finished No. 4 overall.

The report did not include the District of Columbia. "By our criteria, D.C. would not rank very well," Shannon said. "In terms of producing revenue, it's very good, but it doesn't meet our standards for moderate tax rates and a balance among the three forms of taxes."