Florida Ranked #5 Nationally in Business Tax Climate
The Tax Foundation, a nonpartisan, nonprofit organization that monitors fiscal policy nationwide, has released its 2011 edition of the State Business Tax Climate Index, which ranks from 1 (best) to 50 (worst) the tax systems of the 50 states. For this year, Fuerst Ittlemans home state of Florida ranked number 5 in the nation.
Floridas favorable ranking is noteworthy because the other top states are all west of the Mississippi River and are all states with much smaller populations (South Dakota, Alaska, Wyoming and Nevada, in rank order). Across a series of metrics evaluating tax policy and business friendliness, Florida ranked 1st in individual income taxes (there are none), 3rd in unemployment insurance taxes, 15th in corporate taxes, and offered strong tax incentives to businesses to relocate in certain parts of the state. On the downside, Florida ranked 28th in property taxes and 30th in sales taxes
“The top eight tax systems all raise sufficient revenue without imposing one or two of the three major state taxes” that include sales taxes, personal income taxes and corporate income taxes, said Tax Foundation president Scott Hodge. “The lesson is simple; a state that raises sufficient revenue without one of the major taxes will, all things being equal, out-compete those states that levy every tax in the state tax collectors arsenal,” writes Kail Padgitt, Ph.D., the author of the 2011 edition of the Index,
The index hopes to focus attention (from lawmakers and the business community) on “the importance of good tax fundamentals: enacting low tax rates and granting as few deductions, exemptions and credits as possible.” The Foundation discovered that tax incentive programs alone do not work for businesses in the long-run as other forms of state taxation can nullify the incentive gains.
“The temptation is for state lawmakers to lure high-profile companies with packages of tax bonuses,” said Padgitt, “but that strategy often backfires if the company does not prosper.”
We have always championed Florida with our clients and friends as tax-favorable for business organizations. Its nice that the experts agree.