Best Business Environments From a Tax Perspective – 2013 Update

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.

Ted

Comments

  1. Robert W. Apple

    Hum, obviously no business person was involved in the making of these lists and the guess work is mostly wrong. Even with concerns given the costs in time to get approvals now as well as money costs have skyrocketed the overall cost of starting a new business out of control and is now driving even small business investment in other off shore directions as possible. For this reason and let’s face it the internet sales have contributed to declines in fixed retail locations that are drying up here aswell. Just look who is filling those traditional retail spots; money lending, used or antique and dollar type retailers with new services amounting to get your tattoo here. Not intended to be cynical but let’s be truthful considering the piled upon new approvals and rediculous standards that clearly have been imposed to keep useless government bureaucrats working since the start of the recession everyone is seeing less business options available and will continue too as this beat down continues.

  2. Michael Mullin, NMLS 11911

    Just yesterday I spoke to a local businessman who stated emphatically he relocated his company from California to Spokane based upon the lower costs of taxes here. If possible, businesses will gladly relocate to a lower cost state. They can increase profits without the headaches of any other cost saving measures.

  3. Aventura hamptons south

    I hope that these lower costs of taxes will help to improve my business and the over all real estate market as per as 2012 did.

Leave a Reply