NY: Open For Business, Sort Of
New York no longer has the worst business climate in the United States, according to a recently released study by the Tax Foundation.
The Washington, D.C.-based organization recently reported its study showed New York’s overall business tax climate ranking would have improved two spots to 48th in the country if changes in the state budget had been implemented in time for the latest rankings. The rankings for the state’s corporate tax system would have ranked fourth-best, behind Nevada, South Dakota and Wyoming -states that have no corporate income tax.
New York’s improvement comes from reducing the tax bases for calculating corporate taxes from four to three for 2015 and eventually reducing the tax bases down to two; reducing the corporate net income tax rate from 7.1 percent to 6.5 percent; and recoupling the estate tax over time to a higher federal level, exempting many small businesses from huge tax bills when the business’ owner dies.
Those are good steps, but Gov. Andrew Cuomo needs to slow his roll a bit when he says things like, “Our strategy is working and today’s news is proof positive that the new New York is open for business.” New York is not out of the woods just yet. The state is still third-worst in the nation in terms of overall business climate, an indication there are still too many non-business friendly regulations in New York. Meanwhile, New York’s property tax rank is 45th in the nation and its individual income tax rank is 49th in the country.
New York is no longer the worst state in which to do business, but that doesn’t mean it is easy, either. And, as far as taxes go, New York still ranks poorly compared to the rest of the country. Even if New York has the ability to attract new business, it will continue to struggle to attract people to fill the jobs with high property taxes and individual income taxes.
Cuomo, the state Legislature and local officials still have a long way to go.