Study Looks at Taxes Remitted By Business March 10, 2009 Joseph Bishop-Henchman Joseph Bishop-Henchman Anderson Economic Group has released its third annual report ranking the states on business tax burdens. The report looks at 2006 data on taxes where the legal incidence falls on business. Economic incidence should be kept in mind: all business taxes are paid by individuals (whether they be consumers, shareholders, or employees). But looking at legal incidence, as this study does, shows how much states cloud the true tax burden through indirect taxes like business taxes. Here are the top 10 and bottom 10 rankings the study came up with: States with Lowest and Highest Incidence of Taxation on Business (note: FY 2006 data) Lowest Ten States Highest Ten States % Rank % Rank North Carolina 10.88% 1 North Dakota 20.32% 42 Delaware 11.03% 2 West Virginia 20.48% 43 Tennessee 12.01% 3 Florida 20.67% 44 Ohio 12.01% 4 District of Columbia 23.21% 45 Missouri 12.10% 5 New Hampshire 23.44% 46 Louisiana 12.22% 6 Hawaii 23.82% 47 Alabama 12.57% 7 Alaska 25.72% 48 Minnesota 12.58% 8 Vermont 26.45% 49 South Dakota 12.60% 9 Maine 27.40% 50 Connecticut 12.63% 10 Montana 30.61% 51 U.S. State Average 16.69% At their release conference call this morning, the authors graciously complimented our State Business Tax Climate Index, which ranks the states on how their tax structure relates to principles of sound tax policy. The two studies look at different aspects of a similar issue. Another useful study is put out by the Council on State Taxation (COST), which estimates business tax burdens for the current year while also including sales taxes paid on manufacturing inputs (which is not included in the AEG study). Stay informed on the tax policies impacting you. Subscribe to get insights from our trusted experts delivered straight to your inbox. Subscribe Share Tweet Share Email Topics Center for Federal Tax Policy Business Taxes
