The nonprofit Council on State Taxation (COST) says in a new study that Virginia ranks sixth in the country by tax burden on new investment.
Compiled by Ernst & Young in conjunction with COST, the study focuses on the major types of capital investments for which states compete: headquarters facilities, research and development facilities, office and call center facilities and durable and nondurable manufacturing facilities.
It compares all 50 states on the competitiveness of current state and local statutory tax provisions and the financial characteristics of new investments. The estimated tax burdens on selected investments are combined to provide an overall measure of the business tax competitiveness of each state. The state with the No. 1 ranking is Maine, with an effective tax rate of 3 percent, followed by Oregon, 3.8 percent; Ohio, 4.4 percent; Wisconsin, 4.5 percent; Illinois, 4.6 percent and Virginia, 5.4 percent.
The state with the highest tax burden on new investment was New Mexico, which the study said had an effective tax rate of 16.6 percent.
“This latest top-ten ranking prepared for COST by Ernst & Young, recognized leaders in business analysis, joins a long list of accolades that Virginia has earned for its low taxes, skilled workforce, limited regulation and favorable quality of life.,” Gov. Bob McDonnell said in a statement. The full study can be found at http://www.cost.org/WorkArea/DownloadAsset.aspx?id=78442
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