While the New York State 2019-2020 legislative session took steps to improve our state’s tax climate by passing a permanent 2% property tax cap holding local governments and school districts to reasonable spending, there is still much work to be done to ease the state’s heavy tax burden.
The Tax Foundation, a leading independent tax policy research organization, recently released its State Business Tax Climate Index comparing the tax systems of all 50 states.
New York State did not fare so well—again.
In the Foundation’s annual review of tax policy, New York State ranked as the second-worst business tax climate in the nation, moving one more step in the wrong direction compared to last year’s list. The decline in ranking is a reflection on the state’s high personal income taxes, property taxes, sales taxes and unemployment insurance taxes as compared to other areas of the country.
Breaking Down New York’s Ranking
The Foundation’s report showed that New York has the:
- 3rd highest individual income taxes, unchanged from last year
- 5th highest property tax burden, improving one spot over last year
- 8th highest sales tax burden, up one spot over last year
- 13th highest unemployment insurance tax burden, worsening seven spots over last year
- 39th highest corporate tax rate, moving in the wrong direction by six spots over last year
- The business tax climate is an issue across all of Upstate New York.
Michael Kracker, Executive Director of Unshackle Upstate, a bipartisan coalition of more than 80 business and trade organizations representing 70,000 companies employing more than 1.5 million people across Upstate New York, released a statement saying: “Until Albany improves our harsh business climate, employers will continue to struggle, and residents will continue to flee to more welcoming states. With more than 1 million residents having left New York over the last decade, it’s critical that Governor Cuomo and legislative leaders take meaningful action to reduce taxes, ease our regulatory burdens and make our state more competitive…”
The report’s author, Jared Walczak, the Foundation’s Director of State Tax Policy, notes that, even in our global economy, a state’s greatest competition often comes from other states. That is why it is important for our lawmakers to be aware of how New York’s business climate matches up against the state’s immediate neighbors and to other regional competitor states.
The Tax Foundation’s State Business Tax Climate Index is required reading for anyone with a stake in New York State’s tax policy. Click here to read more and download a copy of the report.