Selecting the best location for your business can make a huge difference in the bottom line of your profit and loss statement. While the global mobility talent pool is part of the decision process, taxes are becoming more of a factor.
We’ve all heard the sky is falling cries that outsourcing jobs to another country is ruining America; who would have thought that the majority of massive job and employee relocations are from one state to another state?
While relocation policy benefits, retention targets, customer needs and location are all important facets of deciding on an office site, local tax ramifications are tipping the scales in favor of tax-friendly states.
Those states with a less than favorable tax climate rely on incentives to lure businesses, but this approach is often not successful long term. The absence of taxes is a major differentiator elevating states in the list.
While global mobility is a growing trend, the competition is still most fierce with states competing with other states for the best business climate. The types of taxes included in the research to analyze the tax climate for businesses were Corporate Taxes, Individual Income Taxes, Sales Taxes, Unemployment Insurance Taxes, and Property Taxes.
The 10 best tax friendly states in this year’s Index are:
2. South Dakota
8. New Hampshire
The states in the bottom owe their infamous standings to complex, non-neutral taxes with comparatively high rates.
The 10 lowest ranked states in this year’s Index are:
44. North Carolina
46. Rhode Island
49. New Jersey
50. New York
For insight on individual state standings and the effect of tax differentials, please check out the detailed report, 2014 State Business Tax Climate Index, by Scott Drenkard & Joseph Henchman.