Home

What's New

Contact:
Zack Hutchins
Director of Communications
518.465.7511

November 7, 2007

Analysis ranks New York's business tax climate among worst in the nation

New York's combined state and local business tax climate is among the 10 worst in the nation, according to a recent analysis of state business taxes.

The 2008 State Business Tax Climate, published in October by the Tax Foundation, reports that New York's tax climate ranks 48th in the nation – one place below where the foundation ranked the Empire State on its 2007 index.

The index studies more than 100 variables in five broad categories: corporate taxes, individual income taxes, sales taxes, unemployment taxes, and property taxes.

“New York's individual income, sales, unemployment and property tax systems all rank in the bottom 10, and its sales tax system is second worst,” the report said. And, despite arguments to the contrary, taxes do have an impact on business, the report said.

“Although the market is now global, the Department of Labor reports that most mass job relocations are from one U.S. state to another rather than to an overseas location,” the report said. “So state lawmakers are right to be concerned about how their states rank in the global competition for jobs and capital, but they need to be more concerned with companies moving from Indianapolis, IN to Ithaca, NY, rather than from Indianapolis to India. This means that state lawmakers must be aware of how their states' business climates match up to their immediate neighbors and to other states within their regions.”

The foundation warned against attempts by states to attract businesses with tax and incentives and subsidies.

“Lawmakers create these deals under the banner of job creation and economic development, but the truth is that if a state needs to offer such packages, it is most likely covering for a woeful business tax climate,” the report said. “A far more effective approach is to systematically improve the business tax climate for the long term so as to improve the state's competitiveness.”

A state with a business-friendly tax climate will levy “low, flat rates on the broadest bases possible,” the report said. It's those states that are best suited to economic growth, the report concluded.

A table comparing New York's index rankings to those in other states is available at www.ppinys.org/reports/jtf/businesstax.htm.