Gov. Rick Scott’s plan to create hundreds of thousands of jobs by cutting Florida’s already low corporate tax rate, is a myth. A just-released trade magazine’s survey of why companies choose to locate or relocate in a certain area finds, a low corporate tax rate ranking behind factors such as, transportation and labor cost, among others.
Area Development, a magazine for executives that covers corporate site selection and relocation, surveys why businesses go where they go.
“Over the course of our survey’s 25-year history, highway accessibility and labor costs have invariably been the top-two ranked factors and this year is no different than past years,” the magazine’s story about its latest survey results says.
“Highway accessibility is the number-one factor, considered ‘very important’ or ‘important’ by 97.3 percent of the 2010 Corporate Survey respondents. In other words, sites lacking good infrastructure access are automatically eliminated from consideration.”
Labor costs ranks second, though it has declined in importance from previous years – possibly because unemployment rates have depressed wages.
Three tax-related factors rank in the top 10 with tax exemptions ranking third and state and local tax incentives ranking fifth.
Corporate income tax rates ranked sixth.
The magazine also reported that it expects relocation activity to remain consistent this year, with about 21 percent of companies saying they have plans to relocate a domestic facility in a year or two.
The biggest reason companies relocate? A need to be closer to suppliers and or markets, which is the driving factor for 40 percent. About 20 percent say they want a better business climate and 16 percent say they’d move to get lower operating or occupancy costs.
The Orlando Sentinel reported this week that Florida’s corporate income tax rate of 5.5 percent is near the bottom of the 32 states that have a flat rate, which range from 4.6 percent to 9.9 percent. Only five flat corporate income tax rates are lower than those in Florida; those are in South Carolina, Utah, Michigan, Colorado and Ohio.
The Sentinel also noted that those five states combined are home to 52 Fortune 500 headquarters while the five states with the highest corporate income tax rates are home to more than 120 Fortune 500 headquarters.
The News Service of Florida
