Date post: | 13-Apr-2017 |
Category: |
Business |
Upload: | bloomberg-bna |
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FINDINGS FROM:
WHEN STATES COMPETE: HOW STATE TAX CLIMATES IMPACT CORPORATE INVESTMENT DATA STUDY
2015 Bloomberg BNA study of 100 large US
companies in conjunction with Blackstone Group
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NEW BUSINESS INVESTMENT
Individual states offer corporate tax breaks and
incentives to attract new businesses.
The most influence is on:
• New facility development, not relocation
• High revenue companies ($10 billion+ in
annual revenues)
75% of businesses pay taxes in more than 30 states
/ / 4
POACHING IS COMMON
States try to woo businesses away from other states with tax incentives.
84% of large corporations have been offered relocation incentives by state or
local governments.
34% of businesses say
that taxes influenced their decision to relocate
operations from one state to
another.
50% of businesses say
that taxes influenced their decision to build a new
facility in certain states.
/ / 5
84% of businesses have
been approached with
incentives to leave
only 33% have been
approached with
incentives to stay
BUT RETENTION EFFORTS ARE POOR
INCENTIVES TO STAY INCLUDE:
� Income tax relief
� Property tax relief
� Sales tax credits or abatements
/ / 6
BUSINESSES INFLUENCE POLICY
In the absence of federal tax reform, 56% of businesses lobby at the
state level to change state tax policy.
This percentage goes up to 81% for
companies with over $10 billion in revenue
and falls to 41% for those with less than
$10 billion in revenue.
/ / 7
STATES WITH THE MOST FAVORABLE TAX ENVIRONMENT
TEXAS
NEVADA
FLORIDA
Favorable environments include very low or nonexistent corporate tax
rates and generous economic incentives.
/ / 8
STATES WITH THE LEAST FAVORABLE TAX ENVIRONMENTS
CALIFORNIA
NEW YORK
ILLINOIS
Adverse environments feature high corporate tax rates and less
generous economic incentives.
/ / 9
WHAT BUSINESSES WANT
Businesses are most influenced by:
�Corporate Tax Relief
�Popular Incentives Like: Property Tax Abatement & Credits
�Taxes on Payroll and IT
�State Politics
�Tax Enforcement
Incentives can play a more important role in a business’s decision
to invest in a state than the corporate tax rate.
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RESEARCHING THE TAX IMPLICATIONS
� The varying state tax policies
and incentives mean serious
research is needed before a
business can commit to a
relocation or new
development.
� There are short- and long-
term consequences to
consider beyond corporate
tax rates.
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THE TAX CLIMATE IS RELATIVE
� The friendliness of a state tax climate is relative.
� Modeling different scenarios is the only way to determine and
evaluate the tax implications for a specific business across
states.
� This modeling cannot be done effectively using spreadsheets.
� Tax software reduces errors and improves forecast accuracy
for business decision-making.
/ / 12
BNA STATE TAX™ ANALYZER CAN HELP
� The first multistate, multiyear, multi-scenario
state tax analysis tool for corporate income tax.
� What-if planning, tax provision analysis, quarterly
estimates, and tax audit response.
� Cloud-based solution that delivers a full audit
trail, permissions control, and automatic tax law
updates .
Keep current on tax code changes &
accurately model out various tax scenarios
before making critical business decisions Download the full study
Learn more