Maryland not so friendly in business tax area
A report issued this week by the Tax Foundation ranked Maryland among one of the worst in the nation for its state tax policies. The Foundation has just released its 2013-2014 State Business Tax Climate Index, ranking states based on corporate tax rates, individual income taxes, sales taxes, unemployment insurance and property taxes.
Overall Maryland was ranked 41st out of 50, putting it in the bottom 10 nationwide. Deemed one of the worst for individual income taxes at 46th in that category, Maryland only fared slightly better in unemployment insurance taxes at 40th and property taxes at 41st in the nation. Maryland did rank better in both corporation taxes at 15th and was in the top 10 for its sales tax rate, at number 8. The list does not take into consideration levied fees, which has become a favored method to circumspect tax increases in recent years.
Additionally, the Department of Labor reports that most job relocations are from one state to another, rather than to a foreign location. According to the report issued by the Tax Foundation, states with more competitive tax systems are best suited to generate economic growth. The report further states that providing initial tax incentives to lure companies across state borders does not work in the long run, as after a few years most companies relocate once again to states with a better overall business climate.
State Legislators should take note as they head into the next session, as the neighboring Delaware, ranked 13th overall and Virginia, taking the midway point at 26th may look more attractive to businesses seeking to locate or expand in the Mid-Atlantic region.