By Cathy McKitrick, The Salt Lake Tribune, March 12, 2012
Utah ranks favorably in a new study that compares the total tax burden levied on old and new corporations across all 50 states.
The 200-page “Location Matters” places Utah sixth from the top in terms of lightest tax burden for mature firms (10 years old and up) and 10th overall for newly established firms that qualify for incentives.
Its promoters say the research will be an invaluable tool for companies, but others wonder whether the numbers tell the whole story.
Compiled by the Washington, D.C.-based Tax Foundation and KPMG LLP, a global audit and tax firm, the study uses seven hypothetical firm models — corporate headquarters, research and development facilities, retail stores, call centers, distribution centers, capital-intensive manufacturing and labor-intensive manufacturing.
Current Taxes factored into the total rate include corporate income, property, sales, unemployment insurance, capital stock, inventory and gross receipts. For new firms, incentives include new job credits, investment credits, research and development credits, payroll and withholding tax rebates, and property tax abatements.
In a recent conference call, Tax Foundation president Scott Hodge described the study as “one of the most extensive comparisons of real-world corporate tax costs that’s ever been undertaken.”
Highs and lows “Paying corporate taxes is a lot like buying cars,” Hodge said. “Everyone seems to pay a different price.” However, he believes the state-to-state comparisons will prove useful.
“We’re zeroing in on the firm-level or bottom-line question that we often get from business owners: How much will my company pay in taxes?”
According to the study, Wyoming had the lowest overall tax burden for mature firms, while Pennsylvania had the highest. For new firms, Nebraska had the lightest hit, while Hawaii had the heaviest.
Utah enjoys a relatively low 5 percent corporate income tax rate, but five states — including neighbors Nevada and Wyoming — levy no corporate income tax.
What do the numbers really say? Bob Springmeyer, a principal with the Salt Lake City-based consulting firm Bonneville Research, said the study confines itself to a narrow perspective.
“Wyoming comes out on top because it has no corporate income tax and its other taxes are low. They get all their money from oil, gas and coal. But you don’t find businesses wanting to locate there.”
When Utah faced fierce competition in 2010 to land the contract for the National Security Agency data center at Camp Williams, its favorable energy costs, Internet infrastructure, vibrant software industry and proximity to the Salt Lake City International Airport won the day, not its tax appeal, he argued.
Springmeyer said there was another factor. “Utah ranks low in terms of wages. You can hire good, hardworking, well-educated, dependable people here for less than in most places.”
How much do taxes matter?: The study reinforces that Utah knows how to “keep government out of the wallet of business,” said Christopher Conabee, managing director for corporate recruitment in the Governor’s Office of Economic Development (GOED).
Conabee believes that Utah’s post-performance incentives pose less risk than up-front financial enticements offered elsewhere. Companies recently tapping the state’s incentives include IM Flash Technologies, eBay, Adobe, Procter & Gamble and Goldman Sachs.
Adobe’s website touts its Orem location as a place where employees enjoy diverse seasons, landscapes and recreational opportunities that make it “possible to mountain bike, golf, water ski, and snowmobile — all in one day.”
“When you look at Utah’s total package, that’s why we continue to have great business growth,” Conabee said.Read more...
Bonneville Research was commissioned by the State of Utah to prepare a business plan for the DABC (Utah Dept. of Alcohol and Beverage Control).
Bonneville Research prepared interactive maps showing where current State Liquor and Wine stores are located and where grocery store anchored shopping centers are located and which ones may to too close to schools, churches and other "public places".
Click on the following link to see!
Bonneville Research principals, Bob and Jon Springmeyer presented their report to the Business and Labor Interim Committee on Wednesday morning November 16th. The following news stories are reporting that report.
Rolly: Lawmakers should have taken free advice on liquor sales, Salt lake Tribune, December 15, 2011
Utah state liquor stores really profitable, consultant says, Deseret News, December 13, 2011
Audit: More cash shortages in Utah liquor operations, Salt Lake Tribune, November 23, 2011
Alcohol paradox frazzles lawmakers - IN OUR VIEW - Daily Herald (Provo), November 23, 2011
Liquor Stores - Salt Lake Tribune EDITORIAL, November 21, 2011
Firm suggests liquor stores be in or near grocery stores - Ogden Daily Herald, November 17, 2011
Study shows way to privatize Utah liquor sales, save - The Salt Lake Tribune, Wednesday, November 16, 2011
Demo lawmakers announce new look at DABC day before consultant report - Deseret News, Wednesday, November 16, 2011
Consultant: Grocery stores should sell liquor through separate facilities - Deseret News, Nov. 16, 2011
Research firm suggests ways to increase profits of liquor sales in Utah (Video) - KSTU Fox News 13, November 16, 2011
Utah lawmakers consider changes to liquor business, CBS News, November 16, 2011
Utah lawmakers looking at changes to state-run liquor business, including grocery store sales, The Republic, November 16, 2011
Liquor should be sold by grocery stores, only in different building, consultant says, KSL TV, November 16, 2011
Consultant: Grocery stores should sell liquor through separate facilities - Deseret News, November 16, 2011
Report Recommends Allowing Private Liquor Sales Next to Grocery Stores | KCPW, November 16, 2011
Utah lawmakers hear pitch for more private liquor sales - Salt Lake Tribune, November 16, 2011
INTERVIEW (Audio): Jon Springmeyer - Bonneville Research - Utah's DABC Looking To Minimize Cost And Maximize Profits, KRNS, November 16, 2011
onneville Research is a regional consulting firm focused on providing services to state and local governments including economic analysis for real estate development, public-policy analysis, tourism and economic development. Since its founding in 1976, Bonneville Research has completed assignments throughout the intermountain west yielding unmatched experience in high quality public policy analysis and economic analysis.
Mr. Robert Springmeyer is the principal of Bonneville Research and has consulted with local governments for over 30 years, directing Economic Development Planning Studies for Brigham, Salt Lake, Sandy, Bountiful, Riverton, West Valley and South Jordan Cities. He directed the Economic Analysis/Tax Studies completed for the Downtown Alliance, the Utah State Tax Review Commission and Salt Lake County. Formerly with the international consulting firm, Booz Allen & Hamilton, Bob is educated in Political Science, Economics and Business Management. Bob is a past president of the Salt Lake Rotary Club and a founder of the Mountain West Venture Capital Club. He was the founder of the Ronald McDonald House of Utah, has long been active with the Salt Lake Sister City Committee and was chosen by the British Olympic Committed to be their Olympic Attaché. He has been listed in Who's Who in Finance and Who's Who in the West. Robert Springmeyer is recognized as a pioneer in using "Benchmarking" techniques for economic analysis and forecasting. Bonneville Research was recognized by Envision Utah for a 2003 Quality Growth Award.
Mr. Jon Springmeyer is the Vice President of Bonneville Research and has over ten years experience in commercial property management, construction management industries and the recreation industry. Mr. Jon Springmeyer directs all Urban Renewal/Redevelopment (RDA) projects for Bonneville Research and has been involved with numerous UR/RDA projects along the Wasatch Front including Taylorsville, Holladay and South Salt Lake cities. Prior to joining Bonneville Research, Jon was the Director of Properties for Amsource Development; a Salt Lake City based Real Estate Development Company. As a Facility Director for Salt Lake County Parks and Recreation, he directed operations for publicly owned and funded recreation facilities, and was involved in the development and construction phases of Capital Recreation projects funded by the ZAP Tax (Zoo, Arts, & Parks) including the Dimple Dell Recreation Center in Sandy, Utah and the Draper Recreational Swimming Facility in Draper, Utah. Mr. Jon Springmeyer earned his degree in Political Science from the University of Utah where he was a student leader. Jon's community service involvement includes member of the Holladay City Village Center Collaboration Team, member of the Josie Johnson Memorial Bicycle Ride Organizing Committee, and past Chapter Adviser for the Beta Theta Pi Fraternity at the University of Utah. Mr. Jon Springmeyer is a licensed real estate sales agent in the State of Utah. Jon often performs a key role in Urban Renewal/Redevelopment evaluations, recreational facilities strategies and housing studies.
subconsultant partners include:
Mr Don Adams has over 15 years of economic and real estate development analysis experience. He is knowledgeable in strategic modeling, gap analysis and performance assessments and financial cost/benefit analysis. Mr. Adams has degrees in Urban Planning and Geography from the University of Utah and a Masters of Planning from the University of Southern California. Don is the former Planning and Economic Development Director for Riverton and the Economic Development Director for Taylorsville. Don is a recognized leader of transportation and economic development planning. He is also knowledgeable in facilities planning issues. Mr. Adams often plays a key role in environmentally sustainability, public utility evaluations and transportation planning/feasibility strategies.
Mr Lloyd Alexander is a creative, solutions-oriented finance professional with over 15 years experience in formulating organizational strategies, financial planning, analysis and budgeting, managing relationships with key stakeholders and constituencies, and board and C-level interaction. Comfortable adding value as an individual contributor or in a team leadership role, Lloyd has particular expertise in strategic modeling, gap analysis and performance assessments and financial cost/benefit analysis. He often performs a key role in capital requirement evaluations and financial strategies. Lloyd’s clients have included private equity/venture investors, economic development organizations, and such firms as Alliant Techsystems, AutoLiv, Blue Cross/Blue Shield, Flowserve, Utah’s Center of Excellence Program, and the Technology Transfer Offices at the University of Utah, Utah State University, and Brigham Young University. Lloyd holds a B.S. in Mechanical Engineering from Rensselaer Polytechnic Institute and an MBA from Harvard Business School.
Mr David Baird has successfully led direct economic efforts for multiple cities in the State of Utah. David was the Economic Development Director of the Downtown Alliance of Salt Lake City during the formative development phases of the Gateway development and the 2002 Winter Olympic Games. David also led the economic repositioning of Draper City from 2005 through 2007, during which time the city doubled its sales tax revenue by adding over 900,000 square feet of retail space (including the State of Utah’s largest retail store, IKEA Home Furnishings). During his tenure, over 1 million square feet of business park space was developed to diversify the community’s economy through the strengthening of its employment base. He also founded the Draper Community Development Corporation to lever multiple public-private partnerships in the greater Draper community. David is a member of the Utah Alliance for Economic Development, the International Council of Shopping Centers and the National Association of Industrial and Office Properties. David’s public sector economic development skill set is complemented by his commercial real estate development experience, including serving as the Intermountain West Regional Director of Development for LNR Property Corporation and as the Vice President of Wasatch Property Management in Salt Lake City. David holds a Master of Business Administration degree from the David Eccles School of Business.
Mr. Steve Erickson has extensive experience and personal knowledge of many of the critical issues facing the residents, ranchers, miners, and business persons in Utah and Nevada. Steve’s professional background is in government relations and public policy analysis at state and local levels. Steve has experience as a social services planner, affordable housing development consultant, and nonprofit organization executive. He has worked with sustainable community development and urban and regional planning focusing on public involvement and cultivating the active support of mayors, city councils and key community leaders. He is knowledgeable about the relationship between municipal taxation and development patterns, the linkage between transportation and land use planning, and barriers to affordable housing development. Mr. Erickson has a Bachelors Degree in English and Anthropology from the University of Utah. Mr. Erickson plays a key role for Bonneville Research teams in community development requirement evaluations and implementation strategies.
Bonneville Research is saddened to announce that David Wilcox, long-time friend and associate recently passed away. We will all miss Dave's smile, laugh and creative insights! Thanks Dave.