States are in a better position to attract business investment when they maintain competitive real property tax rates and avoid harmful taxes on tangible personal property, intangible property, wealth, and asset transfers.
Janelle Fritts was a Policy Analyst with the Tax Foundation’s Center for State Tax Policy. She is the lead researcher on the annual State Business Tax Climate Index and was one of the lead authors of Pro-Growth Tax Reform for Oklahoma. Her work has been cited in The New York Times, the Associated Press, Bloomberg, and numerous state media outlets across the country.
Before joining the Tax Foundation team, Janelle interned at the Mackinac Center for Public Policy, the Reason Foundation, and the Illinois Policy Institute. She graduated from Dordt College (Sioux Center, Iowa) with a bachelor’s degree in English with a writing emphasis and a minor in Chemistry.
Janelle was born and raised in Midland, Michigan, which is near Lake Huron and about halfway up the “mitten.” In her free time, she enjoys rock climbing, hiking, swing dancing, and singing. You’ll also find her rocking out to metal in Roxanne, her bright yellow Celica.
An ideal sales tax applies to a broad base of final consumer goods and services, with few exemptions, and is levied at a low rate.
By letting the corporate surtax expire, eliminating taxes on GILTI, and embracing full expensing, New Jersey would take important steps toward creating a more welcoming and competitive tax environment.
Individual income tax rates can influence location decision-making, especially in an era of enhanced mobility, where it is easier for individuals to move without jeopardizing their current job, or without limiting the scope of their search for a new one.
Accelerating its current individual income tax triggers and setting up the corporate income tax for eventual elimination would increase Missouri’s attractiveness among states at a time when businesses are increasingly mobile and tax competition matters more than ever.
While throwback and throwout rules in states’ corporate tax codes may not be widely understood, they have a notable impact on business location and investment decisions and reduce economic efficiency.
If Alabama continues on its current path, its treatment of remote workers would be even more aggressive than that of New York—a shaky legal foundation.
As housing prices are rapidly increasing, and property tax bills along with them, the property tax has come into the spotlight in many states. The design of a state’s property tax system can affect how attractive that state is to businesses and residents.
Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
States can better position themselves for success by moving away from economically-damaging taxes like the capital stock tax.
The changes put forth in a new package of bills would represent significant pro-growth change for Oklahoma that would set the state up for success in an increasingly competitive tax landscape.
Gross receipts taxes impose costs on consumers, workers, and shareholders alike. Shifting from these economically damaging taxes can thus be a part of states’ plans for improving their tax codes in an increasingly competitive tax landscape.
With other states upping their game to attract ever-more-mobile people and businesses, lawmakers and the governor are not content to leave Tennessee’s business taxes in their current, uncompetitive form.
Most states avoid municipal income taxes for good reason. These taxes are more volatile and less economically competitive than other forms of taxation available to local governments, and add substantial complexity for governments and taxpayers alike.
While many factors influence business location and investment decisions, sales taxes are something within policymakers’ control that can have immediate impacts.
New Jersey levies the highest top statutory corporate tax rate at 11.5 percent, followed by Minnesota (9.8 percent) and Illinois (9.50 percent). Alaska and Pennsylvania levy top statutory corporate tax rates of 9.40 percent and 8.99 percent, respectively.
By shifting to a flat income tax, Georgia has already made an important commitment to tax competitiveness. Although the state’s top rate threshold is already very low, a true single-rate income tax will help protect taxpayers from inflation-related tax increases and provide a buffer against rising tax rates in the future. To combine responsible rate reductions with these benefits, Georgia should create tax triggers that empower the state to keep pace with its competition.
The pandemic has accelerated changes to the way we live and work, making it far easier for people to move—and they have. As states work to maintain their competitive advantage, they should pay attention to where people are moving, and try to understand why.
Most of the 2023 state tax changes represent net tax reductions, the result of an unprecedented wave of rate reductions and other tax cuts in the past two years as states respond to burgeoning revenues, greater tax competition in an era of enhanced mobility, and the impact of high inflation on residents.
The logic that has prevailed for local sales taxes should apply equally to other taxes that localities impose on multijurisdictional businesses, including local tourism taxes. The evidence is clear that central administration of local taxes reduces compliance costs without sacrificing local revenue.