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Robert Trigaux

Florida ranks high in business tax climate but Capital One blowback in Tampa is recalled



Florida once again fared well and ranks among the ten best states in the Tax Foundation’s 2010
"State Business Tax Climate Index." Here are the "best" states for business taxes:

1. South Dakota
2. Wyoming
3. Alaska
4. Nevada
5. Florida
6. Montana
7. New Hampshire
8. Delaware
9. Washington
10. Utah

The annual index is described as a tool for lawmakers, businesses and individuals to help measure how their states’ tax systems compare. Policymakers can use the the index to pinpoint changes to their tax systems that might improve their states’ standing in relation to competing states, says the Tax Foundation.

In its annual analysis, the Foundation said the "absence of a major tax" is a dominant factor in vaulting these ten states to the top of the ranking. "Property taxes and unemployment insurance taxes are levied in all 50 states, but there are 12 states that do without one or more of the other major taxes: the corporate tax, the individual income tax, or the sales tax," the Foundation study concludes.

Florida and Texas have no individual income tax. New Hampshire, Delaware, Oregon and Montana
have no sales tax. Wyoming, Nevada and South Dakota have no corporate or individual income tax; And Alaska has no individual income or state-level sales tax. "The lesson is simple; a state that raises
sufficient revenue without one of the major taxes will, all things being equal, out-compete those
states that levy every tax in the state tax collector’s arsenal," the Foundation argues.

Here are the ten states whose tax systems, the Foundation finds, are "most inhospitable" to economic growth:

41. Vermont
42. Wisconsin
43. Minnesota
44. Rhode Island
45. Maryland
46. Iowa
47. Ohio
48. California
49. New York
50. New Jersey


In its analysis, the Foundation pointed out one special case -- in Tampa
-- in which state tax incentives backfired when a company set up shop but then left when the incentives had expired. The company was Capital One, the credit card giant. Says the Foundation:

"State lawmakers are always mindful of their states’ business tax climates, but they are often tempted to lure business with lucrative tax incentives and subsidies instead of broad based tax reform. This can be a dangerous proposition as a case in Florida illustrates.

"In July of 2004, Florida lawmakers cried foul because a major credit card company announced it would close its Tampa call center, lay off 1,110 workers, and outsource those jobs to another company. The reason for the lawmakers’ ire was that the company had been lured to Florida with a generous tax incentive package and had enjoyed nearly $3 million worth of tax breaks during the previous nine years."

In the 2004 photo above, Kathy Castor, then Hillsborough County Commissioner, spoke at a rally for then-presidential candidate John Kerry protesting the shutdown of the Capital One credit card call center on Henderson Road in Tampa. The issue back then? American jobs heading overseas. Photo by Ken Helle of the St. Petersburg Times. Here's my column from that day in 2004.

-- Robert Trigaux, Times Business Columnist

[Last modified: Tuesday, June 1, 2010 11:26am]


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