Taxing Florida

Taxing Florida

GOVERNMENT WATCH by Mark Gordon | Managing Editor

We hear it all the time from government officials: Budgets are tight; government needs more tax revenue. That mantra makes you wonder, though - especially when you see that local and state business tax collections in Florida between 2002 and 2005 rose 38.5%.

According to a recent study released by accounting and consulting firm Ernst & Young LLP, Florida's local and state tax collections from businesses was the fifth biggest percentage increase in the nation.

As the accompanying table shows, Florida was among such states as Wyoming and Alaska, whose percentage increases were large because they had small but growing business bases.

Unfortunately, Ernst & Young's study doesn't distinguish how much of these increases were due to rising tax burdens and/or economic growth.

When comparing how much businesses pay in local and state taxes in relation to their state's overall economic activity - in other words, the business-tax burden, Florida ranked in the second quartile of states with the heaviest business-tax burdens. This is not surprising, given that Florida doesn't have a personal income tax. Texas, another state without a personal income tax, also puts one of the heavier tax burdens on business as a percentage of the total gross state product.

Surprising to some may be that "Tax-achusetts" ranks among the states with the lowest business tax burdens, while Wyoming, that bastion of Dick Cheney conservatism, has the highest burden.

BY THE NUMBERS

STATE AND LOCAL BUSINESS TAXES

Here's a look at where Florida fits in when stacked up against some other states:

CHANGE Fiscal Year 2002 to Fiscal Year 2005, Top 10

State FY 2002 FY 2005 $ Change % Change

1. Wyoming 1.3 2 .7 56.2%

2. Alaska 1.7 2.5 .9 50.9%

3. Nevada 3.0 4.1 1.2 39.9%

4. Minnesota 7.1 9.9 2.8 39.1%

5. Florida 20.6 28.6 7.9 38.5%

6. Massachusetts 8.9 11.8 2.9 32.1%

7. Pennsylvania 15.6 20.3 4.7 30.4%

8. North Carolina 8.3 10.9 2.7 32.2%

9. Utah 2.1 2.7 .6 30.2%

10. Vermont .8 1.1 .2 30.1%

Dollars in Billions

By type and money 2005, large population states

Sales tax Excise Unempl. Total

Property on Business and Gross Corp. Ins. Licenses, Business

State Taxes Inputs Receipts Income Tax Other Taxes

California 18.1 15.8 8.8 8.7 5.2 9.4* 66

Florida 10.4 6.9 7.1 1.7 1.1 1.4 28.6

Illinois 9.9 3.5 4.6 2.5 2.5 2.1* 25.2

New York 17.7 10.8 4 5.7 2.7 4.7* 45.6

Pennsylvania 6.3 3.2 2.7 1.8 2.6 3.7* 20.3

Texas 19.7 10.7 5.9 0 1.7 5.7 43.6

United States 182.8 111.7 63.7 42.1 35.5 61.6* 497.4

Dollars in Billions; *Includes individual income tax on pass-through business income

STATE AND LOCAL BUSINESS TAX BURDEN

Florida's businesses pay less than half of Florida's state and local taxes. But the tax burden still ranks Florida among the heaviest business-tax states. Figures are for 2005.

Business taxes/

Business taxes Total taxes Business private sector

State (billions) (billions) share gross state product

50. Wyoming $2.00 $2.70 73.60% 9.60%

49. Alaska $2.50 $3.30 76.30% 9.30%

48. West Virginia $2.70 $5.50 49.20% 6.60%

48. North Dakota $1.30 $2.10 59.20% 6.60%

46. New Mexico $3.10 $5.80 53.00% 6.30%

45. Louisiana $8.20 $14.20 57.90% 6.20%

44. Maine $2.20 $5.00 44.00% 5.90%

43. Washington $12.90 $25.80 50.10% 5.80%

43. Mississippi $3.70 $7.80 46.90% 5.80%

41. New York $45.60 $110.10 41.40% 5.70%

40. Texas $43.60 $71.40 61.10% 5.60%

39. Vermont $1.10 $2.40 43.30% 5.50%

39. Oklahoma $4.90 $10.60 46.80% 5.50%

39. Kansas $4.60 $10.00 46.50% 5.50%

36. Nebraska $3.10 $6.70 46.80% 5.40%

36. Montana $1.20 $2.70 45.70% 5.40%

36. Hawaii $2.10 $5.50 37.60% 5.40%

36. Hawaii $2.10 $5.50 37.60% 5.40%

36. Florida $28.60 $61.00 46.80% 5.40%

31. Illinois $25.20 $55.50 45.40% 5.30%

30. South Dakota $1.30 $2.10 63.00% 5.20%

30. Rhode Island $1.90 $4.60 41.80% 5.20%

28. New Hampshire $2.40 $4.30 55.90% 5.10%

27. Minnesota $9.90 $23.90 41.30% 4.90%

26. Pennsylvania $20.30 $50.30 40.40% 4.80%

26. California $66.00 $154.10 42.90% 4.80%

24. Ohio $17.60 $43.40 40.60% 4.70%

24. Maryland $9.00 $25.00 35.90% 4.70%

22. Nevada $4.10 $9.00 46.00% 4.60%

21. Tennesse $8.50 $17.00 50.10% 4.50%

21. New Jersey $16.70 $44.30 37.70% 4.50%

21. Indiana $9.30 $21.80 42.90% 4.50%

21. Wisconsin $8.40 $21.70 38.50% 4.40%

21. South Carolina $5.10 $12.20 41.50% 4.40%

21. Kentucky $5.10 $12.60 40.80% 4.40%

15. Michigan $14.20 $34.90 40.80% 4.30%

15. Iowa $4.20 $9.50 44.10% 4.30%

15. Idaho $1.60 $4.10 39.60% 4.30%

15. Arkansas $3.10 $7.90 38.90% 4.30%

11. Arizona $8.60 $17.50 42.50% 4.20%

10. Alabama $4.90 $11.50 42.50% 4.20%

9. Connecticut $6.60 $19.30 43.10% 4.10%

9. Colorado $7.20 $16.60 43.10% 4.10%

7. Massachusetts $11.80 $32.40 36.30% 4.00%

7. Georgia $12.00 $29.80 40.20% 4.00%

5. Washigton, DC $2.00 $4.50 43.30% 3.90%

5. Utah $2.70 $7.50 36.40% 3.90%

United States $497.40 $1,140.60 43.30% 3.90%

5. Missouri $7.10 $17.70 40.10% 3.90%

2. Oregon $4.30 $12.50 34.30% 3.80%

1. Virginia $10.10 $27.70 36.60% 3.70%

1. North Carolina $10.90 $29.40 37.20% 3.70%

1. Delaware $1.80 $3.50 53.50% 3.70%