The State Taxman

Businesses decide to locate in different states for different reasons. One such reason, however, is the aggregate tax burden imposed by a state government. NPGA is composed of businesses that are subject to both individual income and state corporate taxes, depending on their business model (e.g., sole proprietorship, limited liability company, corporation).

At the state level, individual income and corporate tax rates vary greatly from place to place. Some states, such as Florida and Texas do not levy a tax on individual incomes; while others, including California (13.30%) and New York (10.90%) tax personal income at very high rates. This same state disparity exists when it comes to the imposition of corporate taxes. South Dakota and Wyoming, for example, do not tax corporate income. In contrast, other states, including Illinois (9.50%) and Minnesota (9.80%) have high corporate tax rates.

For businesses in the propane industry, excessively high state tax burdens can make it harder to operate a successful enterprise, as more money goes to tax coffers instead of company operations. If you’re interested to learn more about the tax structure in your state, the Tax Foundation has applicable data sets detailing personal income and corporate taxes on a state by state basis.

Fast Facts:

• Six states do not levy a tax on corporate income
• Minnesota has the highest corporate tax rate at 9.80%
• Eight states lack a state income tax (excluding capital gains taxes)
• California has the highest individual state income tax rate at 13.30%

NPGA will continue to monitor state tax policy and determine its potential impact on the propane industry. For more information, contact NPGA’s Director of State Affairs, Jacob Peterson.