PA Tax Law News -- September 2013: PA Business Taxes Rank Mid-Pack

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A recent report compiled by Ernst & Young LLP for the Council on State Taxation (“COST”) provides some interesting tax statistics concerning Pennsylvania business taxes. The report is based on FY 2012 data.

 

In raw dollars, Pennsylvania’s total state and local business tax collections rank 6th among the 50 states and District of Columbia. However, as a percentage of private-sector gross product, Pennsylvania’s business tax collections tie for 29th place. The national average was 4.8%; Pennsylvania’s ratio was 4.7%.

 

Pennsylvania business taxes accounted for 41.2% of total state and local tax collections. The national average was 45.2%.

 

The study also used three different methodologies to gauge the value of business taxes paid as compared to the value of government spending benefitting business. If no part of education spending is allocated to business, Pennsylvania businesses paid $3.10 for every dollar of benefit - a tie for the 33rd highest ratio in the US. Allocating 25% of education spending to business reduced the PA ratio to $1.70 per dollar of benefit - a tie for 28th nationally. If 50% of education spending is allocated to business, the PA ratio falls to $1.10 per dollar of benefit - a tie for 33rd.

 

The complete report may be downloaded at:  www.cost.org.