New York pushing for new businesses
There’s a certain mystique to New York that seems to constantly draw people in. It’s got one of the most popular destination cities in the U.S., and music artists and government officials alike tout reasons as to why it is one of the greatest states for residents and businesses to be in. But what no one ever seems to talk about is the downside to trying to open up shop in NY; even with the tax cuts for young people looking to live in Buffalo and Governor Andrew Cuomo’s plan to spend $1.5 million to boost job creation and community involvement, the Tax Foundation still ranks it as the worst state for small business owners to do business.
The Foundation bases its ranking off of a number of metrics including corporate tax, individual income tax, property tax, sales tax and unemployment insurance tax rankings. For fiscal year 2013, New York ranked number 50 in overall rankings, ranking it as the state with the worst business tax climate. Wyoming, Nevada, Washington and Texas were a few ranked in the top 10 best business tax climates largely due to not levying one of the major taxes such as the corporate, individual or sales tax. High property and unemployment insurance taxes contributed to New York’s low ranking and actually counteract the state’s current campaign to convince businesses to move there.
Pushing positivity to generate growth
Since fiscal year 2011, New York has remained ranked as one of the 10 worst business tax climates, falling from #48 to #50 in the past three years. This likely serves as the impetus behind the state’s recent push to increase marketing and positivity around opening a business in New York in the hopes that more businesses will help turn things around. As taxes play a big part in promoting economic growth, these numbers are dissuasive for business owners. It is apparent that New York businesses have to bring in even larger revenues in order to meet their tax obligations and remain profitable than would businesses in other states.
Although there are some caveats to holding states to the a general ranking, when some enact taxes that others do not, as a business owner, having knowledge around the totality of tax expenses is key in making a decision on location. Therefore, even though government officials are beckoning businesses to travel to the East, it might not be as fruitful of experience as the one being advertised.