A recent study of state and local taxes paid by businesses indicates that businesses paid $671 billion in state and local taxes in fiscal 2013, an increase of 4.3% from fiscal 2012. The study, which provides detailed state-by-state estimates, was prepared by Ernst & Young LLP in conjunction with the Council On State Taxation (COST).
Key Study findings include:
- Following two years of decline in FY 2009 and FY 2010, state and local business taxes increased for a third consecutive year in FY 2013. Overall state and local business taxes increased 4.3%, with state business taxes growing by 4.7% and local business taxes growing 3.67%.
- After three straight year of growth rates below 1%, business property taxes increased 3.7% in FY 2013, a gain of $8.5 billion. Property taxes remain by far the largest state and local tax paid by businesses, accounting for 36.1% of the total.
- In FY 2013, state and local corporate tax collections were $53.3 billion, or 7.9% of all state and local business taxes. (Local jurisdictions in Maryland do not receive corporate income tax revenues.)
- Individual income taxes on pass-through business income accounted for 5.5% of total state and local business taxes. Individual income taxes on business income grew 13.2%, the highest rate of any tax in FY 2013.
- On average, business taxes are equal to 4.7% of private-sector gross state product (GSP), which measures the total value of a state’s annual private sector production of goods and services.
- The corporate income tax has been the slowest to rebound, with 28 of the 47 states that levy some form of corporate income tax not yet returning to their peak level of collections.
State-by-state comparisons for each of these findings can be found in the study.