Businesses paid $554 billion in state and local taxes during the 2006 fiscal year, representing 45 percent of total taxes collected by all state and local governments, according to the annual study prepared by Ernst & Young in conjunction with the Council on State Taxation. The study includes estimates of taxes paid by major industry groups, with the share of taxes paid being determined by a state's overall tax system, the structure of its economy, the types of business taxes levied, as well as business tax features that may provide a competitive advantage or disadvantage in attracting and retaining business employment and investment.

"Although corporate income and payroll taxes have increased sharply since 2002 with the rebound in the economy, property taxes and sales tax on business inputs still account for 60 percent of state and local business taxes," said E&Y’s national director of state and local tax policy economics, Robert Cline, in a statement. "Non-income taxes are important costs of doing business in a state."

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