Newton’s third law of motion states that every action has an equal and opposite reaction. So an increase in costs in one market will cause business to relocate to another. That is the premise on where companies locate if location is not a factor (such as a service provider or manufacturer across the country or even global).
Let’s pretend that today you get to select where your business should be located in the United States—and weather, transportation systems and workforce training levels (among many other factors) do not matter. What is of key importance are respective tax issues related to each individual state.
The Tax Foundation, a non-profit research group located in Washington, D.C., is dedicated to educate taxpayers about sound tax policy and the size of tax burdens borne by Americans at all levels of government.
In one of their many reports, they rank all 50 states based on those with the most and least business-friendly tax policies. That summary article, graphs and tables, can be seen here. [The Tax Foundation Reports are, in my opinion, extremely valuable to see where in the long-run, Main Street and Corporate America aggregates to in the longer run.] The entire 56-page report 2013 report and findings, can be viewed and downloaded at The Tax Foundation.
The Tax Foundation’s study statistics include:
- Corporate taxes
- Individual income taxes
- Sales taxes
- Unemployment insurance taxes
- Property taxes
The study premise is two-fold:
- Taxes do make a difference as to where a company will locate some operations from state-to-state and locale to locale
- States (some) do change tax policies to attract business – which is why almost every city and state have an economic development council
So what are the most tax business-friendly states?
The 10 most highly-rated states in the 2013 State Business Tax Index Include:
The 10 lowest ranking State Business Tax Environment indices include:
If you have any interest at all in the comparative impact of property taxes from one-state to another or even MSAs, or how each state fares in tax revenues, head to The Tax Foundation site and sign up for their weekly data and reports push.
The Tax Foundation reports range from how much fuel taxes and toll roads pay for highway maintenance to the impact of tobacco taxes on smuggling of tobacco into each state.
Tell me if you see companies or individuals changing domicile based on taxes—and I guaranty some do.