State and local taxes represent a significant costs for businesses, and the tax burden varies greatly between different states and industries. The widespread interest in state corporate tax burdens has resulted in a variety of studies but none that provide business leaders or policymakers with a comparison of actual state tax burdens faced by real-world businesses.
KPMG and the Tax Foundation have collaborated on a study which fills this information gap. Location Matters: The State Tax Costs of Doing Business, not only examines the different tax rates faced by different types of businesses, but also highlights how tax codes treat new and previously established firms within each state. Tax Foundation economists created seven model firms in different industries, and KPMG tax specialists calculated the tax bill for those firms in each state, both as new facilities and as mature firms. The study accounts for all business taxes: corporate income taxes, property taxes, sales taxes, unemployment insurance taxes, capital stock taxes, inventory taxes, and gross receipts taxes.
Location Matters can be a valuable resource for a variety of stakeholders to help ensure that:
- CEOs, CFOs, and other corporate stakeholders can better evaluate the relative competitiveness of states in which they operate or states in which they are contemplating business investments
- Businesses and trade organizations can better identify policy improvements for each state
- Site-selection experts can screen states more quickly and accurately for consideration by their clients