A new Tax Foundation study, called Location Matters: A Comparative Analysis of State Tax Costs on Business, analyzed the costs of doing business in each of the 50 states and examined the economic impact of five types of tax incentives, including new job credits, investment credits, research and development credits, payroll withholding tax rebates, and property tax abatements.
“[T]ax 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,” noted Scott Hodge, the president of the Tax Foundation.
Although tax incentives are meant to attract business to a particular state, “they can be a windfall to a firm that would have expanded anyway, can leave out existing firms, and can complicate the tax system,” Hodge said.
But tax incentives helped Ohio rank among the top five low tax cost list for both more established businesses, as well as new firms. The combined effects of property tax abatements, withholding tax credits, and a low rate gross receipts tax, contributed to Ohio’s high ranking.
For so-called mature businesses (which are those that have been established for over 10 years), the top five states with the lowest tax costs are Wyoming, South Dakota, Georgia, Nevada, and Ohio. The highest tax costs for mature firms are New Jersey, New York, Indiana, Massachusetts, and Illinois.
For new businesses, the states with the lowest tax costs are Nebraska, Louisiana, Ohio, Wisconsin, and Oklahoma. States with the highest tax costs for new firms are Massachusetts, Rhode Island, California, Maryland, and Colorado.
For more information about the Tax Foundation study, check out this articleby Bloomberg BNA State Tax Law Editor Priya Nair, published in last week’s issue of the Weekly State Tax Report.
In other developments . . .
For a look at how Wisconsin’s manufacturing and agricultural tax credit will help out farmers and factories, check out this commentary by Kevin McGee in the Northwestern.com.
The controversy surrounding the enactment of a bill in Virginia giving a tax exemption to the Orion Air Group is examined in this PilotOnline.comarticle.
A newly released report by the Legislative Auditor's Office in Louisiana shows that corporations and individuals received $5 billion in tax credits and incentives from 2005 to 2010. However, the report also noted that it is difficult to determine what Louisiana received in return for all of those tax credits and incentives. For more information about the report, check out this article in The Advocate.
Compiled By: Kathleen Caggiano
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)