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Tax Foundation President Scott Hodge on the states with the best and worst tax environments for businesses.
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Well when you sit down and calculate the cost of starting a business location may matter more than you think.
Especially when it comes to taxes a new study released today by the Tax Foundation show some pretty stunning differences state to state.
And even within the same state depending on the type of business you run here with some important.
Hodge president the Tax Foundation Scott welcome back the show.
I wanna drill down into these lists in just a moment because I think ever -- what is gonna wanna see -- see how they're state stacks up.
But first I wanna tell you I want you to explain the different kinds of taxes out there the businesses have to.
Pay.
Well -- this -- most extensive look at how taxes affect businesses across the fifty states.
And we looked at seven different types of firms spanning the industry's.
And -- those firms down and every state to see what they were paying corporate income taxes.
Unemployment taxes property taxes franchise taxes and so forth and -- gives us a look at what the effective tax rate the tax burden would be.
-- -- of those types of businesses in every state.
Not only as a mature firm a well established firm but as a new firm -- eligible for tax incentives and what we found is that.
Paying taxes that the states is kind of like buying cars everybody pays a different rate depending on who they are when they buy and what kind of -- -- they get.
Well -- for at -- for example here according to your own study manufacturers might pay 10% distributors might pay thirty in some states so big differences there.
And certainly differences between states.
Let's start with existing companies the states with the lowest taxes so these are the states we love.
Starting with the I guess Wyoming right back the big winner here.
And Wyoming and -- South Dakota or what I might call the CarMax states they have every daily low taxes every day for.
Every available -- firm.
Of course they don't have corporate income taxes like Nevada and so then stand have the lowest tax burdens.
A for every kind of business.
Then you have other states like Ohio and Georgia and others -- have very low rates for everybody.
And those tend to be the lowest tax burdens for for the most types of -- That we analyzed.
Right states we hate for businesses that as a it starts with Pennsylvania.
Now I was surprised to see this as I would think that would be -- -- it's looking -- to attract new business right.
Well on Pennsylvania has one of the highest corporate income taxes the nation at nine point 95 nine now nine point 99%.
And they also tend to have high property taxes and high franchise taxes which burden all types of businesses.
They do have one exception and that's for why are heavy manufacturers.
And they do tend to -- very well they are but for every other type of business -- how they are one of the highest tax -- states in the nation -- used to seeing Hawaii on this countless they have high taxes but West Virginia.
West Virginia another state with a very high corporate income tax and high property taxes and other taxes that affect businesses.
Unemployment taxes are -- big problem there and tend to drive up the cost for those types of businesses Kansas and Rhode Island.
-- property taxes and high corporate income taxes for Rhode Island but high property taxes.
And other employment unemployment -- taxes in in Kansas.
Make it very uncompetitive.
All right so now let's talk about -- looking to start a new company maybe generate -- even take some time laughing you know start -- company summary you do it anywhere in the country.
What are the lowest tax states for new company.
Well here in Nebraska.
It believes the listed in and Louisiana with the lowest tax burdens.
For new startups or new businesses and largely on the strength or perhaps -- the subsidies that they offer to new businesses in here that's one of the key.
For these low tax burden states for new businesses they often are very generous -- their incentives.
And in -- compared to other states that tend to have higher tax burdens.
Are where he would not want to do business if you're starting a new company and again what we talk about -- why leading this list.
-- -- once again Hawaii and how Pennsylvania once again is at the top of that list with one of the highest tax burdens.
They tended to see no matter what the business is new or existing.
Have those high tax rates both in in corporate income taxes and property taxes unemployment taxes.
Across the board.
They tend to have those high tax burdens and they -- to offer very few incentives as well for especially for new businesses.
What is the absolute best state to do business in.
While still way to Wyoming is that top below list no matter what the business type it is whether it's manufacturing.
Or call center or our R&D facility.
All across the board the Wyoming tends to be the lowest tax place to do business.
Whether your mature or a new firm.
So really it's it's I would say the top place to do business when it comes to paying taxes so I I think in my future little horseback riding operation may be in Jackson hall -- -- do -- forming.
So it's very nice.
Scott thanks for coming on the show tonight.
Great stuff is extensive survey -- -- people go to your website get more details are -- helping hand if it's available free on our website attacks foundation dot org.
Thanks so much for coming on tonight we appreciate it.
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