Ernst & Young and the Council On State Taxation (COST) just released their annual study on “Total State and Local Business Taxes” (pdf) which provides a comprehensive look at the business tax climate. As shown in the chart below, New Hampshire’s state and local tax burden on businesses as a percent of private sector Gross State Product, for Fiscal Year 2010, was 4.4 percent–the 36th highest in the country.
Also, to better understand the “New Hampshire Advantage,” the chart shows that neighboring Vermont (7.1 percent, rank 4th) and Maine (6.8 percent, rank 5th) have business tax burdens that are significantly higher. Although New Hampshire’s business tax burden is on par with Massachusetts’ (4.3 percent, 39th).
The study also indicates that the tax burden on businesses has been declining in recent years. Table 6 on page 11 shows that, between FY 2007 and FY 2010, the tax burden on businesses has declined by $400 million. Interestingly, most of that decline has come from local property taxes which dropped by $300 million, or 19 percent.