Indiana ranks the highest in the nation when it comes to capital-intensive tax rates, according to a recent study by the Tax Foundation.
Indiana rated a 19.2 percent tax on capital-intensive manufacturing, the highest in the nation, according to the study.
The study “is an apples-to-apples comparison of actual state tax burdens faced by real-world businesses,” the Tax Foundation wrote in a news release. “Additionally, it illustrates the different types of taxes and rates businesses face and highlights how differently each state’s code treats new and previously established firms.
Tax Foundation economists created seven model firms in different industries (including capital- and labor-intensive manufacturing), and KPMG tax specialists calculated the tax bill for those firms in each state, both as new facilities and as mature firms (ones that are at least 10 years old).
Here’s a list of the highest and lowest effective tax rates on the mature model manufacturing firms:
The capital-intensive manufacturer faced the highest effective tax rates in:
Indiana (19.2 percent), Mississippi (17.8 percent), Maine (17.6), Vermont (17.2 percent), and Wisconsin (16.5 percent).
The capital-intensive manufacturer faced the lowest effective tax rates in:
Iowa (3.9 percent), Minnesota (4 percent), Wyoming (4.1 percent), Pennsylvania (4.2 percent), South Dakota (4.2 percent).
The labor-intensive manufacturer faced the highest effective tax rates in:
Rhode Island (14.9 percent), Hawaii (14.8 percent), Illinois (14.4 percent), West Virginia (13.6 percent), and Indiana (13.5 percent).
The labor-intensive manufacturer faced the lowest effective tax rates in:
Wyoming (4.3 percent), Virginia (4.3 percent), Georgia (4.6 percent), Maryland (4.9 percent), and Nebraska (5.5 percent).