What comes to mind when you think about a state that’s set up for its communities to succeed and thrive?
There are more than 2 million small businesses in New York State, which employ 4 million people. These small businesses make up 99.8% of all businesses within the state and employ more than half the state’s workforce. We all know that local businesses help support the tax base through businesses taxes and the wages provided to employees. The possibility of workforce expansion and economic growth prompts municipalities, counties, states, and the federal government to offer various forms of assistance, from grants to research opportunities, beneficial legislation, and worker training programs. But not every state is up to speed on supporting businesses, and the end of the year provides the perfect opportunity to reflect on what New York is and is not doing to be competitive in the year ahead.
The business of ranking America’s top states for business in 2021 takes a lot of factors into consideration, and New York doesn’t land a top spot.
To determine rankings, CNBC scored all 50 states on 85 metrics in 10 broad categories of competitiveness. Each category is weighted based on how frequently states use them as a selling point in economic development marketing materials. Rather than an opinion survey, the criteria and metrics are developed in consultation with a diverse array of business and policy experts. This year, Maryland which ranks No. 12 overall, jumped an impressive 19 spots compared to the 2019 study, making it the year’s most-improved state. New York ranks No. 22 on the list. So, what sets Maryland apart, and where does our state fall short? Let’s dive in.
Broadband service in Maryland is among the best in the nation, at a time when connectivity has taken on new importance in the battle for business.
Maryland also has one of the most reliable power grids in the nation, with even more improvements in store. Maryland improved in eight of the study’s ten categories of competitiveness, but nowhere does Maryland improve more than in Infrastructure, where it finishes 8th in 2021, up from the 41st spot in 2019.
Where are we falling short, New York?
Again, New York ranks No. 22. What really hurts the ranking seems to be two areas that likely won’t come as a surprise to our readers. New York ranks No. 41 in the Cost of Doing Business category, and No. 49 in the Business Friendliness category. The proximity to New York City provides excellent access to capital and skilled labor but New York businesses contend with high taxes and a complex regulatory landscape. The business income base tax for the state of New York is 6.5%, though certain businesses might qualify for a reduced 5.5% rate. In addition, businesses could be subject to a capital base tax or fixed dollar minimum tax. State law typically requires corporations to pay whichever is highest.
What’s the takeaway?
The good news is, when it comes to the best and worst states scored by internet coverage, speed, and price access, New York trails close behind Maryland (No. 4) in the No. 7 spot, according to BroadbandNow Research. Maryland is also ranked third for connectivity behind New York and New Jersey, which speaks volumes of New York’s recent investments in internet accessibility. To boost our competitive edge, it would serve local governments to get strategic about business incentives and consider further automation to make our grid even more reliable and efficient to withstand adverse weather events, incorporate cutting edge technologies, and prioritize changing customer needs. If your team or a local business you are serving has questions about complex business tax codes or regulations, we can help. Contact our dedicated Government group at RBT to schedule a consultation today. Additionally, if you would like to submit feedback or topic ideas for future articles our team produces, please feel free to contact us at TLideas@rbtcpas.com.
Sources: CNBC, BroadbandNow, SBA