In May 2021, the Tax Foundation, in collaboration with KPMG LLP, updated its 2015 Location Matters report that ranked state corporate tax costs across multiple industries nationwide.
The 2021 report is a comprehensive comparison of corporate tax costs across the U.S. According to the report, “Location Matters calculates and analyzes the tax burdens of eight model firms: a corporate headquarters, a research and development facility, a technology center, a data center, a shared services center, a distribution center, a capital-intensive manufacturer and a labor-intensive manufacturer. Each firm is modeled twice, first as a new operation eligible for tax incentives and then as a mature operation not eligible for such incentives.
“The result is a comprehensive calculation of real-world tax burdens designed as a resource for policymakers, corporate executives, trade organizations, site-selection experts, and media organizations. Location Matters provides the tools necessary to understand each state’s business tax system, going beyond headline rates to demonstrate how tax codes impact businesses, and offering policymakers a road map to improvement.”
Missouri, for example, was ranked 26th for new firms in 2015, but leaped to 10th in 2021, thanks in part to its new 4% corporate tax rate. For labor-intensive manufacturers looking for a new location, that ranking jumps even further – to fourth in the U.S. California, in comparison, ranks 38th for new firms and 45th for new labor-intensive manufacturing.
Check out the full article on the Business Journals here.