New York has earned a poor grade on yet another ranking of state tax climates — this one issued by the Small Business & Entrepreneurship (SBE) Council, a research and advocacy group based in Virginia.
SBE’s 2014 assessment of “best to worst tax climates” for states puts New York in 45th place, based on a state-by-state comparison of burdens imposed by 21 different taxes including income, capital gains, property, death, unemployment, and various consumption-based taxes, including state gas and diesel levies.
Like the Tax Foundation’s 2014 State Business Tax Climate Index, which was published last October, the SBE’s New York ranking does not reflect the impact of a significant corporate tax reform and reduction approved as part of the 2014-15 state budget, enacted March 31.
Unlike the Tax Foundation, which looks at statewide corporate rates, SBE’s comparison of state corporate taxes appears to rank New York based on the higher top rate in the downstate region, where all business taxes include a 17 percent surcharge to benefit the Metropolitan Transportation Authority (MTA). Excluding New York City’s own very high business income tax, the top corporate rate in the MTA region is being reduced from 8.3 percent to 7.6 percent, or zero for qualified manufacturing companies.
While 45th puts New York among the “worst” states in SBE index terms, it’s still a bit better than the revised, improved ranking of 48th that the Tax Foundation yesterday said would apply to the Empire State in the wake of the budget’s “impressive” corporate tax reform.
The SBE report was prepared by the organization’s chief economist, Long Island-based Ray Keating. Perhaps he should now be expecting a call from Governor Cuomo’s staff.
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