Mapping State Corporate Tax Rates

NCPA October 14, 2013

There is a dramatic disparity among states in their corporate tax rate, which has led to attempts to "poach" companies by governors such as Texas' Rick Perry, who this month used a series of television spots to encourage Maryland companies to relocate there, says the Washington Examiner.

Although the largely conservative interior of the country placed very favorably in terms of tax rates, there are exceptions even there, such as the abysmal showing by Kansas -- where a distribution center can be taxed at more than 65 percent. Plus, Republican-led states were not always markedly better than Democrat-controlled ones.

• Vermont, perhaps best known as home of the hippie ice cream company Ben & Jerry's, is 12th-best for new businesses, while South Carolina placed toward the bottom for new and existing businesses.
• Among the states, the worst to start a new business in are Hawaii, Pennsylvania and Kansas. The best are Nebraska, Louisiana and Ohio.

The tax code is complex, making it easy for politicians to cherry-pick favorable numbers that can easily be cancelled out by other factors. That complexity was highlighted this summer at the federal level, where the corporate tax rate of 35 percent can be far different in practice due to sprawling loopholes, and consensus has been growing to do away with many loopholes and establish a simpler tax code with a lower rate.

It's also marred by tax credits that are given out piecemeal, especially in Rust Belt areas like upstate New York, desperate to attract business at any cost.

Source: Luke Rosiak, "State Corporate Tax Rates Are All over the Map," Washington Examiner, October 1, 2013.