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).
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