NCPA - National Center for Policy Analysis

How Much Are Businesses Paying in Taxes?

September 8, 2014

The Council on State Taxation has released its twelfth annual report on state and local business taxes, finding that businesses paid $671 billion in state and local taxes in the 2013 fiscal year -- 4.3 percent more than they paid in 2012.

2013 was the third year in a row that the amount of state and local business taxes increased. According to the report:

  • Property taxes comprised the largest part of the state and local tax burden -- 36.1 percent of total taxes paid by businesses.
  • Taxes on sales and business inputs were 20.8 percent of all business taxes at the state and local level.
  • State and local corporate income tax collections were less than 8 percent of all business taxes, as the majority of taxes on business come in the form of property and sales taxes.
  • Other taxes on businesses include unemployment insurance taxes, excise taxes, individual income taxes, business taxes, public utility taxes, and insurance and severance taxes.

The report described how businesses pay far more into the system than they receive; on average, a business pays the government $3.26 for every dollar of government spending benefiting businesses. Even assuming that half of all public dollars spent on education benefit local companies, businesses still pay 20 percent more in taxes than they receive in beneficial spending.

Over at Forbes, David Brunori reminds readers that there is another aspect of the tax numbers that readers should remember: it is ultimately people, not businesses, who pay these taxes. That $671 billion, Brunori says, was paid "by some combination of shareholder, owner, employee, customer, or supplier. Those on the left desperately want the burden to fall on shareholders. But there is growing evidence that in a global economy, the burden falls on employees."

Source: David Brunori, "Business Pays A Lot Of State And Local Taxes," Forbes, September 4, 2014; "Total state and local business taxes," Council on State Taxation, August 2014. 

 

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