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Pittsburgh Business Taxes
Ranked Too High
by

This first appeared in the
North Hills News Record

Pittsburgh is a dying city. Proper people don't admit that in polite circles. In public, they gloat about Pittsburgh's commerce, culture, sports franchises and Renaissances, but privately they know all the positive thinking and slick PR hasn't stemmed the mass exodus from the city's borders.

There is no single reason why people, especially the younger generation, flee to other parts of the country but a recent study released by Vertex, Inc. does offer at least a partial explanation.

Vertex, Inc., a leading designer of tax compliance software, knows first-hand how governments devise ways to generate revenue by taxing businesses. By creating a fictitious mid-sized company, Vertex analyzed business taxes in 27 major U.S. cities.

The hypothetical company had 125 employees, gross revenues of $15 million, and profits of $1.5 million. The study measured federal, state, and locally administered taxes as they applied to income, sales, property, payroll, and telecommunications. Also ranked were franchise and license and occupation taxes.

So how did our former most livable city rank in this study? Of the 27 cities, Philadelphia grabbed the top spot with the most brutal business tax burden followed by New York and Seattle. Pittsburgh landed fourth on the list.

Pittsburgh Business
Tax Ranking
Tax Category	Rank
Income	24
Sales	8T
Property	20
Payroll	9T
Telecommunications	8T
Franchise	1T
License & Occupation	1

Pittsburgh has created an exceptionally hostile environment to new businesses with the highest (tied with Philadelphia) franchise tax and it's the uncontested leader of license and occupation taxes. Combining those taxes with the city's perpetual grey skies, would force all but the most optimistic entrepreneurs to look for a fairer business climate.

Of course, it's important to note that not all businesses in our area are subject to the same taxes. With the right amount of schmooze, sports franchises, prized retailers, sexy hi-tech firms that add to Pittsburgh's fantasy of becoming a mini silicon valley, and other key industries are likely to receive tax breaks and other concessions.

It's the low profile, plain vanilla companies, the ones vital to any region's long-term survival, that get stuck with a big tax bill.

There almost was some good news in the Vertex report. Today, Pittsburgh is more appealing to businesses than when the same study was conducted in 1993. Five years ago, Pittsburgh was in second place, but its improved standing had more to do with higher taxes in Seattle and New York than any significant tax reductions here.

At the bottom of the list, Vertex found Los Vegas (27th), Atlanta (26th), Denver (25th), Baltimore (24th) and Charlotte (23rd) had the friendliest business tax climate. Unlike Pittsburgh, every one of these cities is growing.

Lowering all business taxes would go a long way toward revitalizing this area. This is one list that Pittsburgh should be aiming for last place.