Technical.ly Baltimore

Join us for Baltimore Innovation Week, Sept. 12 - 20, 2014

Business

Jun. 13, 2013 8:30 am

MD has 7th lowest business tax burden [REPORT]

Just six states have a more favorable business tax burden than Maryland.

Six states have a more favorable business tax burden than Maryland, according to a report released in May by the Anderson Economic Group.

The report found that this state’s business tax burden is 8 percent, two percentage points lower than the national average.

OK. What does that mean?

  • That 8 percent is the estimate of 11 different state and local taxes paid by Maryland businesses compared to those businesses’ before-taxes operation margin. (What Anderson calls a business’ “ability to pay these taxes.”)
  • Another way the report defines it: the 8 percent is the “share of pre-tax operating surplus.”

The metric is a bit deceptive. Maryland businesses, for instance, paid about $8.7 billion in taxes during FY 2011, which is several billion dollars more than the roughly $4.8 billion Delaware (the state with the most favorable business tax burden) and Washington, D.C., (which is not among the 10 with the lowest tax burdens) combined.

But notice the ratio is the estimate of state and local taxes paid to businesses’ ability to pay the taxes. In terms of total amount of taxes paid by businesses for FY 2011, there are 28 states where businesses paid less in taxes compared to Maryland.

Read the full report here.

-30-
Andrew Zaleski

Andrew Zaleski is a freelance journalist in Philadelphia and the former lead reporter for Technical.ly Baltimore. Before moving to Philadelphia in June 2014, he was a contributing writer to Baltimore City Paper and a Tech Check commentator for WYPR 88.1 FM, Baltimore city’s National Public Radio affiliate. He has written for The Atlantic, Outside, Richmond magazine, Washington City Paper, Baltimore magazine, Baltimore Style magazine, Next City, Grist.org, The Atlantic Cities, and elsewhere.

Profile   /   @ajzaleski   /   Send an email
Advertisement
  • Sean Patrick Murphy

    Curious report. Pretty much everything that I have seen concerning both business and individual tax burden has put Maryland pretty near the bottom of the list (bottom = high tax burden).

    • Andrew Zaleski

      I’ve been searching around for some other reports. Again, I think it’s that metric of overall taxes paid versus a business’ ability to pay those taxes that makes for that 7th lowest number. (I mean, if I made a billion dollars and paid only 0.02% in taxes, that’d be one low tax burden.)