Sixty-one percent of senior financial executives believe their companies total effective state tax rate will increase, according to a survey by Grant Thornton.
Just 2.7 percent of the 530 CFOs, senior controllers and tax executives surveyed by the accounting firm said their rates would go down.
The economic downturn has put a lot of pressure on state budgets, said Brian Murphy, managing partner of Grant Thorntons state and local tax practice, in a statement. While the federal government can run up big deficits and offer tax incentives during hard times, states generally have to balance their budgets each year, and in order to provide tax relief for struggling or emerging industries, often have to raise taxes.
Companies arent getting any breaks on property taxes either. Fifty-five percent of the CFOs surveyed said their property tax assessments have generally increased over the past three years despite plummeting property values in the wake of the real estate bust. CFOs also said that state and local tax filing responsibilities continue to affect their businesses. Seventy-seven percent said the responsibilities have some, significant or a very significant impact.
