June 19, 2013
Letting big, profitable corporations skip out on support for the things that make Virginia one of the best states for
business will undermine the commonwealth’s ability to create jobs and boost the economy. A stronger future for Virginia requires businesses to invest in the key services that build the foundation for real economic growth – things like healthy families, educated workers, safe communities, and well-maintained roads.
Key findings of the new analysis:
- The corporate income tax is a key revenue source for things like schools and public safety.
- The corporate income tax is the third largest source of revenue for the state’s general fund.
- It generated $860 million in 2012 and over $700 million on average annually over the last 10 years.
- Only a third of businesses pay it.
- Only one type of business, legally classified as “C corporations,” is subject to the tax.
- Fewer than 10 percent of Virginia businesses are C corporations.
- In 2012, nearly two-thirds of corporations in Virginia paid no corporate income taxes at all.
- Benefits of a cut flow out of state.
- Businesses would retain or invest about 75 percent of a Virginia tax reduction outside of the state.
- Without the corporate income tax, out of state investors and shareholders would benefit from state services that create a strong business environment essentially at no cost because they don’t live or work in Virginia.