Report: Illinois’ High Corporate Tax Rate Compounded by Other High Taxes | Illinois

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(The Center Square) – A new report shows that Illinois’ corporate tax rate is among the highest in the nation.

A new analysis from the Tax Foundation, an independent tax policy nonprofit, examines how the states compare for 2022. Illinois’ combined business rate is 9.5%, which includes the base of 7% and an additional 2.5% tax known as personal property. replacement fee.

“This is the fifth highest corporate income tax rate in the nation,” said Katherine Lughead, senior policy analyst at the Tax Foundation’s Center for State Tax Policy. “Illinois is considering very high corporate taxes, which impacts business investment in the state.”

She explained that many economists generally believe that the corporate income tax is the most damaging state or local tax in terms of reducing the growth of gross state product over time.

“It’s important to keep in mind that corporate income tax isn’t the only high tax that businesses pay in Illinois,” Lughead said. “They also pay high state property taxes, high sales taxes. These things add up to make Illinois one of the least business-friendly states in terms of high tax burdens across the board.

The neighboring states of Missouri, Indiana and Kentucky all have corporate tax rates of 5% or less. Wisconsin registers at 7.9% while Iowa’s rate is slightly higher at 9.9%.

“In order to reverse the trend of emigration and really attract new employers and new jobs, Illinois is going to have to really re-examine its tax landscape to better compete with these other states that are really trying to make their own states more competitive,” says Loughhead.

Illinois has experienced eight consecutive years of continuous population decline. The state was one of three states to lose population in the last U.S. census.

Last year, 16 states passed or implemented personal or corporate tax rate cuts, the highest number in some time.

“States are really looking for ways to become more competitive, and lowering corporate taxes is one of the best ways to do that,” Lughead said. “The trend over the past two years has certainly been to reduce income tax rates.”

New Jersey and Pennsylvania have the highest corporate tax rates in the country, at 11.5% and 9.9%, respectively. South Dakota and Wyoming do not levy corporate income tax or gross receipts tax.

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