Industry rankings give North Carolina high marks for business, tax climate
Published 12:05 am Sunday, November 8, 2020
SALISBURY — The future of business in North Carolina is bright, say two well-known business climate ranking organizations.
The Tar Heel state tied Georgia atop Site Selection Magazine’s 2020 rankings for the states with the best business climates and also ranked 10th in the Tax Foundation’s 2021 State Business Tax Climate Index.
“It definitely is a feather in our cap to be able to say that we have that high ranking in the Tax Foundation study,” said Rod Crider, president of the Rowan Economic Development Commission.
The Tax Foundation, a Washington D.C.-based organization that Crider said is “highly respected” among site selection consultants, ranked North Carolina’s corporate tax rate of 2.5% at fourth in the country. At No. 10 in overall business tax climate, North Carolina is ranked higher than its neighbors, with Tennessee being the next closest at 18.
North Carolina also claimed a share of the top spot in Site Selection Magazine’s business climate rankings after coming in second to Georgia last year. North Carolina returns to the top spot for the first time since it had a six-year run of first-place finishes from 2005 through 2010.
Landing near the top of industry rankings isn’t just a point of pride for Crider and other local business development organizations; it’s also a recruiting tool. Those rankings could help the state and Rowan County land new businesses and convince existing operations to expand, Crider said.
“Being ranked that high signals to businesses that this is a competitive place to do business and is a place that wants to see businesses succeed and have structured their tax and regulatory environment in a way that makes it so,” Crider said.
While organizations like the Rowan EDC can utilize business-friendly tax rates when luring new companies to the state, it is partially up to state legislators like Sen. Carl Ford, R-33, to determine what tax rates businesses and individuals pay the state. Ford said that North Carolina’s good business climate exists because for “the last 10 years, we’ve been cutting red tape and cutting taxes for individuals and for businesses.”
“That’s how we got Chewy. That’s how we’re getting a lot of big companies moving to North Carolina and some staying who were thinking about leaving,” said Ford, who also mentioned that North Carolina ranked No. 1 in Forbes’ 2019 climate rankings. “It’s all about cutting taxes and regulations. Businesses will stay, bigger and better businesses will come. That’s what it’s all about.”
Ford said that recovering from the impact of the COVID-19 pandemic will be critical for North Carolina’s ability to remain at the top of business climate rankings.
“What we want to do is get out of this continuous shutdown mode,” Ford said. “It has already killed businesses in our area for decades and I’m talking to businessmen everyday who say that if we don’t get back to halfway normal, they’ll be done.”
For Ford, helping businesses recover from the coronavirus pandemic means “getting government out of the way.” He also said that his next goal was to push for the elimination of the state’s franchise tax, an additional levy paid by some businesses in the state.
While beneficial tax rates are helpful in bringing business to North Carolina, Crider said that a variety of factors “have to match up first.”
“Once they’ve kind of identified the region, then they’re going to start looking at the cost structure,” Crider said. “And that includes the tax environment, like what the regulatory environment is like in the state, how business friendly the state is and then they’re going to look at other factors, too, like labor costs, transportation costs, all the different variables that go into their cost structure.”
Ford said that North Carolina can provide many resources that businesses are looking for and that the state is “growing every day.”