Capitol Confidential ? Tax Foundation: NY still ranks last for business

This is interesting in light of today?s scheduled events, which include an update on Wall Street?s contribution to the state economy by Comptroller Tom DiNapoli and a NY Works meeting which is part of a Cuomo initiative to rebuild the state?s economy.

The Tax Foundation which, granted, looks askance at taxes, ranks New York dead last in terms of the business tax climate. They cite not just the income taxes but the state?s property taxes, unemployment taxes (overly complex and saddled with surcharges, they say) and overall complexity.

Here?s what they said:

Despite moderate corporate taxes, New York scores at the bottom this year by having the worst individual income tax, the sixth-worst unemployment insurance taxes, and the sixth-worst property taxes. The states in the bottom 10 suffer from the same afflictions: complex, non-neutral taxes with comparatively high rates.

Here?s the full release, followed by statements from the folks at the Federation of Independent Business with links to the full report:

Washington, D.C., October 9, 2012?Wyoming, Florida, and Texas rank among the ten best states for taxes on business, while companies in states like New York, New Jersey, and California have a far less pleasant tax climate to deal with, according to a new report by the Tax Foundation.

The State Business Tax Climate Index, now in its 9th edition, collects data on over a hundred tax provisions for each state and synthesizes them into a single easy-to-use score. The states are then compared against each other, so that each state?s ranking is relative to actual policies in place in other states around the country. A state?s ranking can rise or fall significantly based not just on its own actions, but on the changes or reforms made by other states.

The Index therefore enables business leaders, government policymakers, and taxpayers to make an apples-to-apples comparison of their state?s tax system. While some similar studies focus on the total amount residents pay in taxes each year, the Index focuses on whether the state?s tax code itself enhances or harms the competitiveness of its business environment.

The top ten states in the 2013 Index are Wyoming (#1), South Dakota (#2), Nevada (#3), Alaska (#4), Florida (#5), Washington (#6), New Hampshire (#7), Montana (#8), Texas (#9), and Utah (#10).

Many of the top ranking states states do not have one or more of the major statewide taxes, such as a personal or corporate income tax or a sales tax. Wyoming, South Dakota and Nevada, for example, have no corporate or individual income tax; Alaska has no individual income or state-level sales tax; Florida has no individual income tax; and New Hampshire and Montana have no sales tax.

The 10 lowest ranked states in the 2013 Index are Maryland (#41), Iowa (#42), Wisconsin (#43), North Carolina (#44), Minnesota (#45), Rhode Island (#46), Vermont (#47), California (#48), New Jersey (#49), and New York (#50).

Despite moderate corporate taxes, New York scores at the bottom this year by having the worst individual income tax, the sixth-worst unemployment insurance taxes, and the sixth-worst property taxes. The states in the bottom 10 suffer from the same afflictions: complex, non-neutral taxes with comparatively high rates.

Maine saw the greatest improvement this year, vaulting them from 37th to 30th best overall, in part due to a repeal of their alternative minimum tax. Michigan also made a sizable leap of six places by replacing their cumbersome and distortionary gross receipts tax (the Michigan Business Tax) with a flat 6 percent corporate income tax. This improved their overall rank from 18th to 12th best, and their corporate sub-rank from 49th to 7th best.
?Even in our global economy, a state?s strongest and most immediate competition often comes from other states,? said Tax Foundation economist Scott Drenkard. ?State lawmakers need to be aware of how their states? business climates match up to their immediate neighbors and to other states in their region.?

Each year the State Business Tax Climate Index is downloaded hundreds of thousands of times and cited in hundreds of newspaper articles, editorials, and broadcast media reports. State legislators often invoke their state?s score when advocating for reform measures, and several governors have cited the Index?s findings in their State of the State addresses.

And from the NFIB

Albany (October 9, 2012) ? A new report by the non-profit Tax Foundation ranks New York again dead last among all states for its business climate. That, according to the National Federation of Independent Business (NFIB), is an embarrassing distinction that leaders in Albany must change.

?New York ranks in the bottom ten in every tax category except the corporate tax,? said NFIB State Director Mike Durant. ?Governor Cuomo said two years ago that New York has no future as the tax capital of the United States, but that?s exactly what we are and unless that changes none of the other reforms will matter.?

The Tax Foundation ranks New York 50th overall. The state ranks 50th on income taxes, 45th on unemployment taxes, 45th on property taxes, 38th in sales taxes and 23rd in corporate taxes.

?We?re leading the country in all the wrong categories,? said Durant. ?The two biggest taxes for small businesses are the income tax and the property tax, and those are higher than almost anywhere else.

?If we?re serious about changing New York?s reputation as a place to do business, then we need more than a slick advertising campaign,? he said. ?We need real reform that starts with fewer mandates on local governments which drive up property taxes and we need lower, flatter income taxes that reward people for working and investing here.?

For more information about NFIB, please visit www.nfib.com

Click here to view the Tax Foundation report: http://taxfoundation.org/article/2013-state-business-tax-climate-index

Source: http://blog.timesunion.com/capitol/archives/159554/tax-foundation-ny-still-ranks-last-for-business/

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