Taxes and other “structural” aspects of a state’s economy often receive great attention. For one, they are easy to identify and the arithmetic is grade school level. High taxes are seen as a negative and low taxes are a positive. But if you have to run a business, you know that taxes are simply one of many factors in how well your business may function.
A recent survey by the Christian Science Monitor came up the surprising result that Minnesota, a state known for high-taxes. But it is the rare business where tax payments so overwhelm revenue that they drive it out of business.
As the study notes, finding a skilled workforce is becoming a greater priority with many businesses. And skilled workers do not become skilled absent the outlay of substantial sums of money.
Where taxes fund good schools and provide an educated, skilled workforce and provide for well-maintained roads, which facilitate the commerce, those higher taxes may actually promote a stronger and wealthier community, better able to purchase the goods or services your business provides.
Nonetheless, the thing to keep in mind is that one very important element of taxes, whether those assessed by the Minnesota Department of Revenue or the Internal Revenue Service, is that you need to maintain compliance.
Delinquent taxes, missing filings, improper handling of payroll tax trust funds, being subjected to tax liens or simply needing to resort to litigation with either of those agencies can be a tremendous drain on your business, in terms of focus and expense.
Avoiding those problematic issues by accurate compliance can greatly improve your own business climate.
Source: csmonitor.com, “The best state for business? High-tax, union-friendly Minnesota.” Cristina Maza, June 25, 2015
