States are Hiking Business Taxes
September 25, 2003
State and local taxes on businesses in the United States totaled nearly $400 billion in 2003, according to the Council on State Taxation. And it appears that the tax burden is being shifted from individuals to businesses.
- Taxes on business constitute 43 percent of all state and local taxes collected.
- Business tax payments overall increased 5.3 percent, or $20.3 billion in new-tax dollars, including property taxes, excise and gross receipts taxes, corporate income taxes, general sales taxes, licensing fees and payroll taxes.
- The rate of growth in business tax hikes is trending upward, growing 1.6 percent in Fiscal Year 2001, 2.1 percent in FY 2002 and 5.3 percent in FY 2003."
Over the same three year period, nonbusiness taxes, including personal income taxes, increased by only 1.6 percent. Thus businesses picked up the tab for 80 percent of all new tax revenue in the past three years.
"What's beneficial to state coffers in the short term, may hurt them in the long run," warns the association, "when the economy improves and corporations compare tax climates in various states, looking for places to grow."
Source: Robert Cline, William Fox, Tom Neubig and Andrew Phillips (Ernst & Young), "Total State and Local Business Taxes, Fiscal Year 2003 Update," Council On State Taxation, September 2003.
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