Report ranks Illinois on the backside of the nation on taxes | Illinois
(The central square) – A new one report found Illinois among the worst states in the country when it comes to corporate taxation.
The recent “Location matters“Study, published by the Tax Foundation, calculated and analyzed the tax costs of eight model firms in each state in the country. The researchers examined a corporate office, a research and development facility, a technology center, a data center, a shared services center, a distribution center, a capital-intensive manufacturer and a labor-intensive manufacturer.
“Businesses face a lot more than just high corporate taxes,” said Katherine Loughead, senior policy analyst at the Tax Foundation. “Often people think of corporate income tax as the main tax, but the tax burden that companies face is much more than that.”
Each model company was examined twice, first as a new company that received tax breaks and then as a mature company in the future.
“Illinois offers a number of incentives,” Loughead said. “It does reduce the burden on newer companies, but once they are, say, 10 years in the state, many of those tax incentives run out and companies now have one of the highest tax burdens in the country. ”
Looking at the results of the report, Illinois ranks in the bottom third of the states for six of the eight mature business types and the bottom ten for four of the firms. New firms were faced with tax burdens halfway down the road.
“The tech hub that has been in the state for 10 years or more had the worst overall tax rate effect in Chicago compared to any of the larger cities in any of the other states,” Loughead said. “That is problematic and makes Illinois a lot less attractive to be a technology center.”
The state also had one of the top ten tax burdens for a mature corporate headquarters, research and development company, and labor-intensive manufacturer.
“The study really shows how important the tax base is,” Loughead said. “It’s not just the rates that matter, but a large part of the tax burden depends on whether a company has a lot of capital and how the government handles various assets … does the property tax apply to equipment and inventory?”
The report takes into account all business taxes, including corporate taxes, property taxes, sales taxes, unemployment insurance taxes, capital stock taxes, inventory taxes, and gross income taxes.
According to Loughead, one of the key takeaways from the data is that tax structure and tax bases are as important or even more important than tax rates.
The full report is available on the website of the tax foundation.