Some of the most substantial deductions in the federal tax code are the itemized deductions for state and local income, sales, and real estate taxes. This map shows the variation, by county, in the amounts of...
- The Tax Policy Blog
- When It Comes to Business Taxes, Location Matters
When It Comes to Business Taxes, Location Matters
Taxes are a big cost for many businesses, and vary widely based both on state and market sector. Now, for the first time, we have created a measurement of the bottom-line tax liability a firm would face doing business in each of the 50 states. In addition, the new study, Location Matters, measures the tax differences between companies in different industries and between new and existing companies within each state.
Location Matters: A Comparative Analysis of State Tax Costs on Business is a guide for anyone making decisions about new manufacturing facilities, corporate headquarter relocations, or state government affairs. It highlights the sometimes surprising differences in how different kinds of businesses are taxed within the same state.
Said Tax Foundation president Scott Hodge:
Corporate taxes on the state level rarely treat all comers equally, leading to sometimes dramatic disparities in the cost of doing business. Tax preferences and incentive deals can distort the playing field based on how long a business has been operating, whether it's a manufacturing or retail operation or whether it's moved from another state to set up shop.
The states which ranked best overall (for mature firms) were led by Wyoming at #1, followed, in descending order, by South Dakota, Georgia, Nevada, and Ohio. Lowest ranked states included Pennsylvania, which came in last at #50, followed by Hawaii, West Virginia, Kansas, and Rhode Island.
Read or download the new study here.
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The Tax Policy Blog is the official blog of the Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937. Our economists welcome your feedback. If you would like to send an e-mail to the author of a blog post, please click on that person's name to locate his or her e-mail address or visit our staff page here.