Tax Foundation Study: Find Out Which State Has The Best Tax Rate For Manufacturers
Last month, the Tax Foundation released a study that looked at the effective tax rates for manufacturers in all 50 states. According to the foundation, “Corporate income tax burdens can be quite substantial, particularly for labor-intensive firms. In many cases, however, the actual corporate income tax rate is a poor predictor of actual burden, especially for new firms. Sixteen states offer withholding tax rebates, 24 states offer investment tax credits, and 24 states offer job tax credits to new labor-intensive manufacturers, all holding down – and in some cases eliminating – income tax burdens, at least for the first few years of operations.”
The study divided manufacturers into two categories: capital-intensive and labor-intensive. Iowa, Minnesota, Wyoming, Pennsylvania and South Dakota provided the best rates for capital intensive manufacturers while Wisconsin, Vermont, Maine, Mississippi and Indiana levied the highest effective rates for these companies. Wyoming, Virginia, Georgia, Maryland and Nebraska offered the best rates for labor intensive manufacturers while Indiana, West Virginia, Illinois, Hawaii and Rhode Island imposed the highest tax burdens on these manufacturers.
Click here to find out where your state ranks.