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Washington State’s Tax Costs on Business: comparison to other states

The Tax Foundation has released its study "Location Matters, a Comparative Analysis of State Tax Costs on Business."

Washington State ranks 17th overall for mature operations and 40th overall for newly established operations. Selected key findings from the study for Washington State are summarized below. The study can be accessed here. The data is searchable by state and Washington's summary is here.

Mature Operations

  • Best ranking: Retail stores & call centers: WA ranked 4th
    • Tax burden for retail is 28% below the national average and 33% below national average for call centers.
    • Main Reasons:
      • WA has no income tax at either state or local level (although it does have a Business and Operations (B&O) tax).
      • WA has a relatively low property tax burden for these operations.
  • Worst ranking: Corporate headquarters: WA ranked 46th.
    • Tax burden on Corporate HQs is 42% above national average.
    • Main Reason: Although WA has no income tax and a low property tax burden, WA has the highest sales tax costs and among the highest costs for unemployment insurance (UI).

New Operations

  • Best ranking: New Retail. WA ranks 17th for new retail operations.
    • Tax burden is on average 8% below national average.
    • Reason: Low income tax and property tax.
  • Worst ranking: New Corporate Headquarters. WA ranks 49th.
    • Tax burden (total) is 81% above the national average.
    • Reason: highest sales tax burden in nation combined with above-average UI costs and gross receipts tax.