Cost of Doing Business

 

Business Cost Comparison – Midwest
Taxes & Factors INDIANA ILLINOIS IOWA KENTUCKY MICHIGAN MINNESOTA MISSOURI OHIO WISCONSIN
Corporate Income Tax Rate (a)

 6.0%

5.75% by 2018

5.5% by 2019

5.25% by 2020

4.9% by 2021

       9.5%

(7.0% +2.5% replacement tax)

6% – 12% 4% – 6% 6% 9.8% 6.25% 0 – 0.26% 7.9%
State Apportionment of Corporate Income Single Sales Factor Single Sales Factor Single Sales Factor Sales, Property, & Payroll with Sales Double-Weighted Single Sales Factor Single Sales Factor Sales, Property, & Payroll Equally Weighted Gross Receipts Tax (known as Commercial Activity Tax) Single Sales Factor
Individual Income Tax Rate  3.23% 4.95% .36%-8.98% 2%-6% 4.25% 5.35%-9.85% 1.5%-5.9% 0 – 4.997% 4%-7.65%
Local Average Individual Income Tax Rate (b) 1.56% None 0.45% 2.08% 1.7% None 0.5% 2.25% None
Sales Tax Rate 7% 6.25% 6% 6% 6% 6.875% 4.225% 5.75% 5.0%
Local Average Sales Tax Rate (c) None 2.45% 0.80% None None 0.55% 3.8% 1.4% 0.42%
2018 Tax Foundation Property Tax Index Rate 4 45 39 36 21 28 7 11 26
Inventory Tax No No No Yes Partial No No No No
Unemployment Insurance Tax – New Employer Rate 2.5% 3.23% 1.0% 2.7% 2.7% Industry Average Industry Average 2.7% 3.05%-3.25%
Unemployment Insurance Tax – Wage Base $9,500 $12,960 $29,900 $10,200 $9,000 $32,000 $12,500 $9,500 $14,000
Workers’ Compensation Premium Rate Rank 2 44 28 16 18 30 32 12 40
Workers’ Compensation Premium Rate Index (per $100 of payroll) $1.05 $2.23 $1.86 $1.52 $1.57 $1.91 $1.92 $1.45 $2.06
Mean Hourly Wage (d) $21.51 $27.32 $21.32 $21.13 $24.38 $26.27 $22.39 $22.65 $22.09
Cost of Living Index 96.4 111.8 99.0 93.9 96.6 106.0 98.0 98.7 103.9
Right To Work Yes No Yes Yes Yes No Yes (pending referendum) No Yes

 

(a) The corporate income tax rate decreases are effective July 1 each year noted.
(b) The effective local income tax rate is calculated by taking the mean of the income tax rate in the most populous city and the capital city.
(c) City, county and municipal rates vary. These rates are weighted by population to compute an average local tax rate.
(d) QCEW 2016 – Statewide, Total-all industries, Private, All establishment sizes, Average Annual Pay/2080

Source: Tax Foundation (10/2017). Federation of Tax Administrators (State Apportionment of Corporate Income, 1/2017). Oregon Dept. of Consumer & Business Services (Oregon Workers’ Compensation Premium Rate Ranking, 10/2016). Various state unemployment insurance agencies. ADP FastFacts. PayrollTaxes.com. Bureau of Labor Statistics – Quarterly Census of Employment & Wages (9/2017). Emsi 2017.3 (using C2ER Cost of Living data). National Right To Work Legal Defense Foundation. Area Development (9/2017). Chief Executive (5/2017). CNBC (7/2017). Forbes (11/2017). U.S. News (2/2018).