Wisconsin businesses paid more than $8.5 billion in state and local taxes in 2011. The largest business tax was the property tax, accounting for over half the total. Businesses also paid more than $1 billion in sales (16% of the total) and unemployment (12%) taxes. The corporate income tax—the most often discussed business tax—was only 10% of the total. As a percent of private sector output, Wisconsin’s business taxes ranked 31st nationally, although the state’s unemployment, corporate income, and property taxes ranked in the top half of states.
Tax rhetoric inevitably heats up during election years, and one part of the debate centers on business taxes.
Some view businesses as important to job creation and focus on lessening or simplifying the tax burden on them. Others emphasize the need to fund increased public services with what they see as a more suitable mix of revenue.
This debate is an important one but rarely relies on facts.
OVERVIEW
A discussion of business taxation often focuses on the corporate income tax, but businesses pay a variety of taxes and fees, and some do not have to pay the corporate income tax. In fact, Wisconsin businesses paid $8.5 billion in taxes in 2011 but only $852.9 million was from this tax.
Major business taxes also include those on property, sales, income, and employment. The state also places additional levies on utility companies, insurance companies, and hospitals. The three largest taxes (property, sales, and unemployment) accounted for almost 80% of all business taxes. (See Figure 1, page 2)