FINDINGS FROM:

WHEN STATES COMPETE: HOW STATE TAX CLIMATES IMPACT CORPORATE INVESTMENT DATA STUDY

2015 Bloomberg BNA study of 100 large US

companies in conjunction with Blackstone Group

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NEW BUSINESS INVESTMENT

Individual states offer corporate tax breaks and

incentives to attract new businesses.

The most influence is on:

• New facility development, not relocation

• High revenue companies ($10 billion+ in

annual revenues)

75% of businesses pay taxes in more than 30 states

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TAX CONSIDERATIONS FOR BUSINESS RELOCATION

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POACHING IS COMMON

States try to woo businesses away from other states with tax incentives.

84% of large corporations have been offered relocation incentives by state or

local governments.

34% of businesses say

that taxes influenced their decision to relocate

operations from one state to

another.

50% of businesses say

that taxes influenced their decision to build a new

facility in certain states.

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84% of businesses have

been approached with

incentives to leave

only 33% have been

approached with

incentives to stay

BUT RETENTION EFFORTS ARE POOR

INCENTIVES TO STAY INCLUDE:

� Income tax relief

� Property tax relief

� Sales tax credits or abatements

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BUSINESSES INFLUENCE POLICY

In the absence of federal tax reform, 56% of businesses lobby at the

state level to change state tax policy.

This percentage goes up to 81% for

companies with over $10 billion in revenue

and falls to 41% for those with less than

$10 billion in revenue.

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STATES WITH THE MOST FAVORABLE TAX ENVIRONMENT

TEXAS

NEVADA

FLORIDA

Favorable environments include very low or nonexistent corporate tax

rates and generous economic incentives.

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STATES WITH THE LEAST FAVORABLE TAX ENVIRONMENTS

CALIFORNIA

NEW YORK

ILLINOIS

Adverse environments feature high corporate tax rates and less

generous economic incentives.

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WHAT BUSINESSES WANT

Businesses are most influenced by:

�Corporate Tax Relief

�Popular Incentives Like: Property Tax Abatement & Credits

�Taxes on Payroll and IT

�State Politics

�Tax Enforcement

Incentives can play a more important role in a business’s decision

to invest in a state than the corporate tax rate.

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RESEARCHING THE TAX IMPLICATIONS

� The varying state tax policies

and incentives mean serious

research is needed before a

business can commit to a

relocation or new

development.

� There are short- and long-

term consequences to

consider beyond corporate

tax rates.

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THE TAX CLIMATE IS RELATIVE

� The friendliness of a state tax climate is relative.

� Modeling different scenarios is the only way to determine and

evaluate the tax implications for a specific business across

states.

� This modeling cannot be done effectively using spreadsheets.

� Tax software reduces errors and improves forecast accuracy

for business decision-making.

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BNA STATE TAX™ ANALYZER CAN HELP

� The first multistate, multiyear, multi-scenario

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� What-if planning, tax provision analysis, quarterly

estimates, and tax audit response.

� Cloud-based solution that delivers a full audit

trail, permissions control, and automatic tax law

updates .

Keep current on tax code changes &

accurately model out various tax scenarios

before making critical business decisions Download the full study

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