Corporate tax contributions to the states

September 16, 2017

Business-tax-confusion-drawing
One of the major drivers of the latest federal tax reform effort is the corporate tax rate.

The Trump Administration is still pushing for a 15 percent corporate tax rate, the White House's budget director, Mick Mulvaney, told CNBC last week.

However, just the day before Treasury Secretary Steven Mnuchin conceded a 15 percent rate would be difficult to attain.

Meanwhile, one Washington, D.C.-based tax policy group has looked at how much corporate taxes contribute per capita to state coffers.

That analysis by The Tax Foundation earns this week's Shout Out Saturday honors.

Not a major tax matter: "The corporate income tax is one of the smallest sources of state tax revenue," writes Morgan Scarboro, a policy analyst at The Tax Foundation. "According to Census data, in FY 2015, the corporate income tax only comprised 5.3 percent of state tax collections."

The corporate income tax also often is mistakenly seen as the only taxes businesses face. Wrong, notes, Scarboro. Companies also pay sales tax, property tax, excise tax and payroll tax.

In fact, the corporate income tax makes up only 9.5 percent of total business taxes.

The Tax Foundation's map below shows how much state governments collect in corporate income taxes per capita.

Corporate Income Tax by State PerCapita_Tax Foundation map

Where it does count: New Hampshire collects the most at $433 per capita, with Delaware shortly behind at $424 per capita.

On the other end of the business tax spectrum, six states don't levy a corporate income tax at all. They are Nevada, Ohio, South Dakota, Texas, Washington and Wyoming.

Just some more tax data to keep in mind as the 2017 Internal Revenue Code rewrite effort continues.

You also might find these items of interest:

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