State’s Business Tax Climate Lags
A state’s tax climate has a lot to do with how much new business investment it will attract. According to a new study by Ernst & Young LLP, Connecticut ranks 13th-worst in the nation for state and local business tax competitiveness.
“As states recover from the recent recession, legislators and policymakers are focusing attention on state policies designed to retain and expand employment and attract new investment,” said Ernst & Young in the study’s executive summary. “State and local business tax policy is an important element of this policy discussion.”
The study assessed the competitiveness of current state and local business taxes on mobile capital investment on a state-by-state basis.
It weighed how taxes factored into how attractive states were for headquarters facilities; research and development facilities; office and call center facilities; and durable and nondurable manufacturing facilities.
Estimated tax burdens on selected investments were combined to provide an overall measure of the business tax competitiveness of each state.
Included in the analysis were all major state and local business taxes associated with new capital investments—such as corporate income and franchise taxes, real and personal property taxes and sales taxes on business input purchases.
Among our competitive neighbors ranking better than Connecticut were Massachusetts, New York, New Jersey, New Hampshire and Vermont.
The study was conducted before the General Assembly passed the new, two-year state budget that will increase taxes by as much as $2 billion.
For more information, contact CBIA’s Bonnie Stewart at 860.244.1925 or firstname.lastname@example.org.
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