TODAY'S PAPER
38° Good Morning
38° Good Morning
Business

NY State second-worst in business tax climate, report says

New York State has the second-worst tax climate

New York State has the second-worst tax climate for businesses in the country, a new report says. The State Capitol is seen in Albany on Sept. 4, 2016. Photo Credit: Getty Images / iStock / Debra Millet

New York State has the second-worst tax climate for businesses in the country for the fourth year in a row, a nonpartisan think tank said Tuesday.

The Tax Foundation, in its annual review of tax policy, ranked New York 49th among the 50 states because of high taxes on personal income, property and purchases.

New Jersey had the nation’s worst tax climate, placing 50th — unchanged from last year. California was again 48th, and Vermont, the District of Columbia and Minnesota rounded out the bottom five. (Vermont and Washington, D.C., tied for 47th.)

Wyoming, which doesn’t tax personal and corporate income, continued to have the best climate, the Washington-based foundation said.

In terms of types of taxes, New York ranked 49th in levies on personal income, 47th in property taxes and 43 in sales taxes — each unchanged positions from last year’s report.

The Empire State fared better when it comes to corporate income taxes, placing 7th in the country — the same placement as last year and an improvement over 11th place two years ago.

A spokesman for the state Division of the Budget said Tuesday that Gov. Andrew M. Cuomo had successfully persuaded the state legislature to reduce some taxes to record low rates.

“This administration has been rigorous and effective in constraining state spending growth to the lowest level in modern history — resulting in lower taxes for all New Yorkers,” said spokesman Morris Peters, referring to the annual 2 percent cap on state spending increases.

“We now have the lowest corporate tax rate since 1968, the lowest manufacturers tax rate since 1917 and, with the new income tax cuts phasing in this year, the lowest middle class tax rates since 1947,” he said.

The report’s authors — Jared Walczak, Scott Drenkard and Joseph Bishop-Henchman — praised the phased reduction in New York’s corporate income tax rate.

They also said a reduction in the capital stock tax rate, from 0.125 to 0.1 percent, could eventually improve the state’s property tax ranking. The capital stock tax, which is sometimes called the franchise tax, is levied on the wealth of a corporation or its net worth.

“The capital stock tax is on a path to repeal, which can be expected to produce improvements on the property tax component in future editions” of the foundation’s State Business Tax Climate Index, the authors said.

Some business groups called on Cuomo and the legislature Tuesday to do more to reduce business costs.

“When 48 states have better tax climates than yours, it’s not just a policy failure, it’s a systemic crisis for a government mired in corruption scandals, and beholden to narrow special interests,” said Doug Kellogg, communications director for Reclaim New York, an activist group with conservative donors. He urged state leaders to pursue “broad tax reform and mandate relief.”

More news