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Two Large Ohio Cities Most Tax-Friendly for US Businesses: Study

Jun 24th 2014
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Which of America’s major cities offer the most favorable tax structures for businesses? According to a study released on Tuesday by KPMG International, the top five in the United States are Cincinnati, Cleveland, Atlanta, Baltimore, and Pittsburgh.

In its new report, 2014 Competitive Alternatives: Focus on Tax, KPMG International examined the total tax burden that companies in 107 cities throughout 10 countries may face, including:

  • Corporate income taxes
  • Capital taxes
  • Sales taxes
  • Property taxes
  • Miscellaneous local business taxes
  • Statutory labor costs

Of the 51 international cities with populations exceeding 2 million that were highlighted in the study, Cincinnati ranked seventh overall with a total tax index (TTI) of 73.5, representing tax costs 26.5 percent below the US baseline of 100.0.

Another Ohio city, Cleveland, ranked 11th with a TTI of 80.2, followed by Atlanta at 12th (81.1), Baltimore at 13th (81.2), and Pittsburgh at 14th (81.9).

Hartley Powell, principal in the Global Location and Expansion Services practice of KPMG LLP, said Cincinnati and Cleveland ranked so high because of Ohio’s business tax structure. He noted in a written statement that Ohio “has no state corporate income tax, low statutory labor costs, and exemptions of personal property and inventory from property tax, providing both of these Ohio cities with relatively low corporate tax burdens.”

Other Rankings
The top five midsized US cities – those with populations between 1 million to 2 million – that have the most favorable tax climate are:

  1. New Orleans (TTI of 61.0)
  2. Trenton, New Jersey (80.9)
  3. Raleigh, North Carolina (82.2)
  4. Wilmington, Delaware (82.3)
  5. Indianapolis (86.7)

Of US cities with populations of under 1 million, the study found the following five have the best tax structures for businesses:

  1. Baton Rouge, Louisiana (TTI of 60.7)
  2. Shreveport, Louisiana (61.1)
  3. Omaha, Nebraska (70.1)
  4. Youngstown, Ohio (72.9)
  5. Bangor, Maine (79.9)

According to the study, the top five major cities around the world with the best tax structures for businesses are:

  1. Toronto, Ontario, Canada (TTI of 51.6)
  2. Vancouver, British Columbia, Canada (54.5)
  3. Montreal, Quebec, Canada (55.6)
  4. Manchester, United Kingdom (58.1)
  5. Monterrey, Mexico (69.4)

The top five countries with the most favorable tax structures for businesses are:

  1. Canada (TTI of 53.6)
  2. United Kingdom (66.6)
  3. Mexico (70.2)
  4. Netherlands (74.5)
  5. United States (100.0)