Cost of Doing Business

Business Cost Comparison – Midwest
Taxes & Factors INDIANA ILLINOIS IOWA KENTUCKY MICHIGAN MINNESOTA MISSOURI OHIO WISCONSIN
Corporate Income Tax Rate (a) 6.0% current;
reduced to 4.9% by 2021
7.75% 6% – 12% 4% – 6% 6% 9.8% 6.25% 0.26% 7.9%
State Apportionment of Corporate Income Single Sales Factor Single Sales Factor Single Sales Factor Sales, Property, & Payroll with Sales Double-Weighted Single Sales Factor Single Sales Factor Sales, Property, & Payroll Equally Weighted Gross Receipts Tax 0% – 0.26% (known as Commercial Activity Tax) Single Sales Factor
Individual Income Tax Rate  3.23% 3.75% .36%-8.98% 2%-6% 4.25% 5.35%-9.85% 1.5%-6% .495%-4.997% 4%-7.65%
Local Average Individual Income Tax Rate (b) 1.56% None 0.45% 2.10% 1.75% None 0.5% 2.25% None
Sales Tax Rate 7% 6.25% 6% 6% 6% 6.875% 4.225% 5.75% 5.0%
Local Average Sales Tax Rate (c) None 2.39% 0.79% None None 0.39% 3.64% 1.39% 0.41%
Property Tax Index Rate 4 46 40 36 25 33 7 11 34
Inventory Tax No No No Yes Partial No No No No
Unemployment Insurance Tax – New Employer Rate 2.5% 3.45% 1.0% 2.7% 2.7% 1.44% or 8.34% 2.7% 2.7% 3.05%-4.55%
Unemployment Insurance Tax – Wage Base $9,500 $12,960 $29,300 $10,200 $9,000 $32,000 $13,000 $9,000 $14,000
Workers’ Compensation Premium Rate Rank 2 44 28 16 18 30 32 12 40
Workers’ Compensation Premium Rate Index (per $100 of payroll) $1.05 $2.23 $1.86 $1.52 $1.57 $1.91 $1.92 $1.45 $2.06
Mean Hourly Wage (d) $21.21 $27.07 $20.93 $20.77 $23.93 $25.94 $22.12 $22.40 $21.75
Relative Value of $100 $109.41 $99.30 $110.74 $112.74 $106.27 $102.46 $111.86 $111.98 $107.07
Right To Work Yes No Yes Yes Yes No Yes (effective 8/28/17) No Yes

Source: IEDC

(a) The corporate income tax rate and individual income tax rate decreases are effective July 1 of each year.
(b) The effective local income tax rate is calculated by taking the mean of the income tax rate in the most populous city and the capital city.
(c) City, county and municipal rates vary. These rates are weighted by population to compute an average local tax rate.
(d) QCEW 2015 – Statewide, Total-all industries, Private, All establishment sizes, Average Annual Pay/2080

Source:  Tax Foundation (2017 State Business Tax Climate Index).  Federation of Tax Administrators (State Apportionment of Corporate Income, Jan 2015).  Oregon Dept. of Consumer & Business Services (Oregon Workers’ Compensation Premium Rate Ranking, Oct 2016).  Various state unemployment insurance agencies.  PayrollTaxes.com.  Bureau of Labor Statistics – Occupational Employment Statistics (9/2016).  Bureau of Economic Analysis – 2014 Regional Price Parities (7/2016). National Right To Work Legal Defense Foundation. Area Development (9/2016). Chief Executive (5/2016). CNBC (7/2016). Forbes (11/2016).  Tax Foundation (9/2016).