Utah ranks 10th in Business Tax Climate Index

For three years running, Utah has been ranked No. 10 in the State Business Tax Climate Index. The Tax Foundation constructs the index for business leaders, government policymakers and taxpayers to see how their tax systems stack up against other states. The index helps business owners to decide in which states their businesses would profit the most.

Cameron Jensen, a WSU student majoring in business management, said he hopes to open his own business when he graduates.

“By watching the reports, we can have a better understanding of what is going on, not only in our state, but in the states surrounding us,” Jensen said. “It’s important to take into consideration that a business might do well in a different state.”

A major deciding factor for the top 10 states is the absence of a major tax. Major taxes not seen in several of the top 10 states are the corporate tax, the individual income tax and the sales tax.

Cami Stone, a WSU student and manager at Klassy Kwik Stop, a family-owned business in Ogden, is directly affected by tax increases. She said that each year around tax time, they fear any possible increase.

“When the taxes go up, our prices go up, and when prices go up, people stop buying,” Stone said. “When people stop buying, then we don’t make a profit and can’t make a living.”

Past evidence has shown the states that ranked higher were more competitive in driving business to their states. States in the top 10 were also more effective at generating economic and employment growth.

“This past year, we have been doing well enough to double our staff,” Stone said. “We plan on growing each year, and hope to expand and build three more convenience stores by next fall.”

The Tax Foundation stresses that tax changes are the quickest way to improve a state’s business climate. Changes to the health care, transportation or education systems can take several years to make a difference.

The Department of Labor reported that a majority of mass job relocations in the U.S. move from state to state versus overseas.

“Why would you stay in a state that taxes everything they can, when you can pick up your business and take it somewhere that you’ll be successful?” said Jill Hunter, owner of Klassy Kwik Stop. “I have nothing holding me here but my business, but if we don’t do well here, then we would have to leave.”

Utah ranked in 10th place overall, and ranked 22nd in sales tax, 20th in unemployment insurance tax, 14th in individual income tax, fifth in corporate, and third in property tax.

Utah’s neighbor Wyoming came in first place this year, while Idaho ranked 20th, Nevada ranked third, Arizona 25th, and Colorado 18th.

“Right now, our taxes in Utah are fairly low,” Stone said. “We have friends and family in other states who run businesses and are struggling. Utah needs to keep up the good work and keep the taxes low. We want to drive business to Utah, not drive it away.”

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Posted by on November 10, 2012. Filed under Business/Careers, Science & Tech. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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