The Council of State Taxation (COST) just released its annual report on the impact of state and local taxes on business across America. COST found businesses paid $577 billion in 2007 which is a 6% increase over 2006 and a 44% increase from 2002, the trough of the last economic slowdown.
On average nationally, business taxes represented 44.1% of all state and local taxes collected last year. Washington was higher than the national average with 51%. Businesses accounted for 53.4% of local taxes and 46.3% of state taxes in our state.
IUnemployment insurance premiums, which are paid solely by employers. are included in the COST analysis. According to 2006 data reported in the 2008 Washington Alliance for a Competitive Economy (WashACE) Redbook (latest publication), Washington's yearly unemployment costs per employee are second highest in the nation. In Alaska, the cost is $831 where as Washington comes in at $803. Oregon is third at $672. The national average is $315 and in South Carolina, where major portions of the Boeing 787 fuselage are manufactured, unemployment tax payments per employee are $154 each year.
With Washington lawmakers expecting to see a $2.5 billion revenue shortfall when they come to Olympia next January, they need to be mindful that state and local taxes and associated fees have a dampening impact on our state's economy, the ability of employers to stay in Washington and expand job opportunities, and maintain our competitiveness globally.
As COST's new report illustrates, costs of doing business in Washington and in our cities and counties, make a difference.
Don C. Brunell, President (DonB@awb.org)
