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Home > Blogs > Ohio politics > Archives > 2011 > April > 27 > Entry
Tax study: Ohio has third-lowest tax burden for new business investments
Only two states - Maine and Oregon - have lower tax burdens for new business investments than Ohio, according to a new study released by the Council on State Taxation, a business-backed group, in conjunction with Ernst & Young, the professional services firm.
“Competitiveness of State and Local Taxes on New Investment” found that Ohio has an effective tax rate of 4.4 percent on new investment, lower than all states and the District of Columbia, except Oregon, with a 3.8 percent rate, and Maine, with a 3.0 percent rate, the lowest nationally.
The findings contrast with some other studies such as those done by the Tax Foundation, which has issued negative findings about Ohio’s business tax climate. The Tax Foundation in a report last year - 2011 State Business Tax Climate Index - rated Ohio 46th nationally in terms of a favorable tax climate.
The new study, released Tuesday, focuses on capital investments in industries that have location choices for factories and headquarters, not on investments tied to specific locations such as hotels and restaurants.
Tom Zaino, a former Ohio tax commissioner, said the new study reflects the changes made in the 2005 overhaul of the Ohio tax code and which finally have been fully phased in.
“This is now proving out,” said Zaino. “We are well positioned among other states.”
States with lowest effective tax rates on new investment
*Maine, 3 percent
*Oregon, 3.8 percent
*Ohio, 4.4 percent
*Wisconsin, 4.5 percent
*Illinois, 4.6 percent
*Virginia, 5.4 percent
*New Hampshire, 5.4 percent
*Delaware, 5.7 percent
*Wyoming, 5.8 percent
*Minnesota, 6 percent
States with highest effective tax rates on new investment
*West Virginia, 9.7 percent
*Alabama, 9.7 percent
*Mississippi, 10.2 percent
*Tennessee, 10.3 percent
*Hawaii, 10.8 percent
*Louisiana, 11.1 percent
*Kansas, 11.2 percent
*Rhode Island, 11.5 percent
*District of Columbia, 16.6 percent
*New Mexico, 16.6 percent
Comments
By Great in Dayton
April 27, 2011 10:32 PM | Link to this
It is not the public unions that are making this debt. It was the private company unions that ran all the business out of the state and country. Get Right to Work Legislation passed and we will be able to pay for our Policeman and Firemen again. The businesses will come back if you get rid of the unions.
By darn liberal
April 27, 2011 10:31 PM | Link to this
“Atlas Shrugged” is fiction. There are no communists arouond here, but it seems there are a bunch of selfish, self centered, borish and poorly educated people. When a corporation has billions of dollars in profits, do you not understand that they can pay a fair share in taxes. I pay more in taxes than General Electric and Exxon combined. I make less than $50,000. a year.
By Quentin
April 27, 2011 6:07 PM | Link to this
I love the left’s responses on this. So it is simple, who do you think pays those corporate taxes? Simple, it is YOU the consumer since you either have to raise prices to cover those taxes or go under and then those jobs are gone. Kind of like saying that if SB5 passes then no one will be able to pay for anything. Umm, where do those public workers get their paychecks? Oh, from TAXES that private companies and private sector workers pay. If the private sector is either gone because they are taxed in to leaving, go under or those people can’t afford the prices of things, then there will be no taxes to pay the PUBLIC SECTOR people their wages. Sorry but a union won’t help there then since you can’t just borrow all the money to pay them because sooner or later people will want the money they loaned paid back! I love the logic in your arguments and then to claim anyone pointing out that this is only a tax rate relating to NEW investments in NEW businesses is a serious flaw and ignores the “facts” you see I just destroyed with a bit of common sense and understanding on how government and economies work.
By JD
April 27, 2011 2:22 PM | Link to this
This does not take into account property taxes, local taxes, corporate taxes, unemployment taxes, sales taxes, etc. Ohio is the 7th worst business friendly state. AMEN and it is going to get worse because who his going to have money to buy things with SB5 passing? Also who would want to work protecting your life at $8.00 dollars an hour? YOU?
By Me
April 27, 2011 1:19 PM | Link to this
China has the best tax plan and wages. $1.40 pr hr average. Just think, them scummy workers don’t show up? Just have them shot!!!Yep all the Capitalists get “Excited” at the mention of China. Big market, cheap cheap and more cheap labor. So what if we give them all the knowledge they need to attack us thru the internet. Plus destroy our military. hey a Capitalist needs to make a buck!! Thats what all this screaming about entitlements and overpaid workers is about. Your overpaid at 30K a year but a CEO is underpaid at 11 million.Just ask any Politician who has been bought by these people.
By Dave
April 27, 2011 12:12 PM | Link to this
Mike, quit confusing us with facts and logic. We believe what we want to believe and that’s that!
By Mike
April 27, 2011 12:02 PM | Link to this
Essentially, the right wing is arguing that taxes on businesses need to be 0 across the board. They aren’t saying that specifically, but when they argue that businesses could/should go to the place that gives them the best tax deal, eventually the end result is a company playing places against each other until taxes are either zero or states are paying companies for the honor of their presence. There is a problem in the culture of business as it relates to society as a whole in that businesses have way too much power over the rest of society because they have the ability to blackmail the rest of society to its own advantage without any fear of reprecussions and without any need to contribute to society as a whole. Conservatives need to admit that their complaints about the corporate tax rate, even when legitimate, are a secondary problem in relation to the problem of corporations having complete negotiating power over the country. If public unions are a problem due to power over the state, then corporations are a bigger problem for the exact same reason.
By Look Closer...
April 27, 2011 11:14 AM | Link to this
This only addresses new investment, and remember how we seem to forgive taxes in the beginning? nowonder we are ranked low. Then after you’re established here, the CAT,workers & unemployment compensation, state & local incomes taxes, property taxes,many times a labor union, all pile on to make you regret being in a “mature manufacturing state”. That why the South is a preferred destination to former Ohio businesses.
By Part of the story
April 27, 2011 11:05 AM | Link to this
That’s fine…now just figure out how to lower the OVERALL tax burden for businesses in this state. There’s a reason why businesses have been fleeing this state for the last decade, and it’s not because Ohio has low taxes and regulations.
By Navin Johnson
April 27, 2011 10:52 AM | Link to this
Steve, you stated your reasons for not trusting Kasich are his calling a state trooper an idiot, and his mis-statements. Obama said the Cambridge police officer “acted stupidly”, and his many mistatements are documented. Do you trust Obama, and would you call Obama supporters “gullible”?….Just curious
By Navin Johnson
April 27, 2011 10:52 AM | Link to this
Steve, you stated your reasons for not trusting Kasich are his calling a state trooper an idiot, and his mis-statements. Obama said the Cambridge police officer “acted stupidly”, and his many mistatements are documented. Do you trust Obama, and would you call Obama supporters “gullible”?….Just curious
By Really?
April 27, 2011 10:37 AM | Link to this
There are a lot of Ohio business owners out there who just spit their coffee all over their computers in reaction to this story. Search the web for “Ohio CAT Tax”
By Steve Baker
April 27, 2011 10:36 AM | Link to this
Ohio has the 3rd lowest tax burden for new business investments through a tax overhual implemented in 2005 under Ted Strickland. Senate Bill 5 savings to school districts are grossly overstated. The governor breaks a traffic law and publicly calls the trooper an idiot for issuing him a ticket. Then there are his “mis-statements” about Bob Evans restaurants. I wouldn’t trust Kasich as far as I can throw him. What’s incredible is that the gullible voters in Ohio would actually put a union-busting dipstick in office.
By ohiodale
April 27, 2011 10:07 AM | Link to this
This does not take into account property taxes, local taxes, corporate taxes, unemployment taxes, sales taxes, etc. Ohio is the 7th worst business friendly state.