Did you read the heartland.org article? It doesn't say that "New Jersey has the worst business climate," it says that "New Jersey has the worst business TAX climate."
Big difference. This statement is based primarily on the breadth of the sales tax base.
NJ doesn't tax toilet paper, food, or clothing. This places more of a tax burden on people buying TVs and cars, and less on people buying things like cereal for their kids. If that means NJ has a bad business tax climate, so what?
Honestly, I'd rather pay 7% for my TV knowing that people who can't afford TVs didn't have to shell out more to feed their kids so that my TV could be cheaper.