If you have overlooked manufacturing in New York State (NYS) due to perceptions about the tax rate, it’s time to take another look – what you find may surprise you.
NYS is in fact one of the least expensive tax states in the country for manufacturers.
In 2014, Governor Cuomo and the State legislature reformed the State’s tax code, bringing the corporate income tax rate for qualified manufacturers to 0%. You read that right. Zip. Zero. Zilch.
But then you ask yourself: if this is really the case, why aren’t third-party thought leaders taking note of this and changing their tune when it comes to NYS as a ‘high-tax state’? In fact, they most certainly are.
The Tax Foundation and KPMG recently released their annual study titled Location Matters: The State Tax Costs of Doing Business[i]. This study, unlike many others, claims to provide a true “apples-to-apples comparison of corporate tax costs in the 50 states,” accounting for all business taxes (e.g. corporate income, property, sales, etc.) and offering a more accurate effective tax rate. The study went a step further, factoring governmental incentives that each state offers for new firms, while also determining the effective tax rates for mature firms that are not eligible for extra incentives.
How does New York State compare?
The results paint a very clear picture: from a tax perspective, New York is one of the most affordable states to do business for manufacturing companies:
- For a capital-intensive manufacturer, New York has the 5th lowest effective tax rate (2.3%) for a new company to the state.
- This ranking drops just one place to 6th for a mature firm in the state (4.5%).
- For labor-intensive manufacturers the Empire State ranks 8th for new companies (3.8%), but does drop to 18th for a mature firm (7.2%). Still, even 18th is a lot higher than many of us have been led to believe!
My team and I at Invest Buffalo Niagara know that when you combine this extremely attractive tax structure with the region’s highly productive workforce, our unparalleled quality of life, and great resources like Buffalo Manufacturing Works, it’s a winning combination for manufacturers.
So come join us and bring your advanced manufacturing facility for the ride!
Read our Advanced Manufacturing Guide
By Alan Rosenhoch, business development manager, Invest Buffalo Niagara