Cincinnati, Baltimore, Cleveland Score High Marks as Most Tax-Friendly Large Cities For Business: KPMG Report New Orleans Has Most Cost-Competitive Tax Structure Among U.S. Mid-Market Cities; Baton Rouge Fares Best in Small-Market Category

NEW YORK, Sept. 25, 2012 /PRNewswire/ -- Cincinnati, Baltimore and Cleveland offer the most favorable tax structures for businesses among U.S. cities/locations with populations exceeding 2 million, according to a study released today by KPMG International (KPMG).

Of the 55 large international cities highlighted in the study, Cincinnati, Baltimore and Cleveland all ranked in the top 20 – 16th, 17th and 18th, respectively. Among the 14 countries in the study, the United States ranked eighth in terms of favorability of its overall tax structure for business.

The study also shows New Orleans and Baton Rouge – two major Louisiana markets – had the most cost-competitive tax structure among locations in the mid- and small-sized city categories, respectively, while a third Louisiana location, Shreveport, ranked second among small cities.

KPMG's 2012 Competitive Alternatives: Focus on Tax study is a global comparison of the total tax burden that may be faced by companies in 113 cities throughout 14 countries including corporate income taxes, capital taxes, sales taxes, property taxes, miscellaneous local business taxes and statutory labor costs.

"While we've come to expect our large cities to compete internationally to provide competitive tax incentives for business, it's heartening to see a number of locations in the mid- and small-sized city categories ranking high in the overall U.S. study," said Hartley Powell, principal in the Global Location and Expansion Services practice at KPMG, LLP, the U.S. member firm of KPMG International. "With three Louisiana cities faring so well and the high rankings among the large cities for Ohio's Cincinnati and Cleveland, it's clear that some states are working particularly hard to make their cities more competitive in terms of corporate tax."

According to the study, Cincinnati had a total tax index of 80.8, representing tax costs 19.2 percent below the U.S. baseline of 100.0. Baltimore and Cleveland followed at 83.3 and 85.2, respectively.

Other U.S. cities that ranked in the top 20 among international cities for most cost-competitive tax structure included Atlanta (86.7) and Pittsburgh (89.1).

Sector Classifications

The 2012 Competitive Alternatives: Focus on Tax report also highlights which cities offer the lowest tax burdens for business based on sectors. This year's report reviews the digital, research and development (R&D), corporate services, and manufacturing sectors.

As a location for digital operations, Atlanta (71.1), Orlando (75.2) and Tampa (75.3) topped U.S. cities in the large city category for most cost-effective tax structures.

Minneapolis (85.1), Atlanta (87.3) and Cincinnati (90.0) were the top three large cities in the R&D sector for most favorable tax structures.

For manufacturing operations, where property taxes and taxes on equipment and capital are of greater importance, the three large U.S. cities providing the most cost-effective tax structures for business were Cincinnati (76.6), Baltimore (78.1) and Cleveland (82.2).

The large-sized cities with the most cost-effective tax structures for the corporate services sector included Atlanta (86.8), Cincinnati (88.2) and Orlando (89.3).

Mid-sized Cities

In the mid-sized city category (populations between 1 million to 2 million), cities offering the most favorable tax climate for business were New Orleans, (67.7), Wilmington, Del. (85.1), and Raleigh, N.C. (85.5).

Small-sized Cities

Cities offering the most favorable tax-structure for business in the small-sized city category (populations under 1 million) were Baton Rouge, La. (66.5), Shreveport, La. (70.7), and Omaha, Neb. (73.1).

The full text of the 2012 study by KPMG International is available online at: www.CompetitiveAlternatives.com/reports/2012_compalt_report_tax_en.pdf.

KPMG's 2012 COMPETITIVE ALTERNATIVES FOCUS ON TAX STUDY
(U.S. cities with populations of more than 2 million)

City

Total Tax Index

Rank


City

Total Tax Index

Rank

Cincinnati, OH

80.8

1


Chicago, IL

95.0

15

Baltimore, MD

83.3

2


Detroit, MI

95.9

16

Cleveland, OH

85.2

3


Houston, TX

98.4

17

Atlanta, GA

86.7

4


Phoenix, AZ

98.4

18

Pittsburgh, PA

89.1

5


Dallas-Fort Worth, TX

98.6

19

Orlando, FL

89.6

6


Sacramento, CA

100.2

20

Minneapolis, MN

89.8

7


Riverside-San Bernardino, CA

100.4

21

Philadelphia, PA

90.8

8


San Diego, CA

101.0

22

Tampa, FL

91.0

9


New York City, NY

101.3

23

Boston, MA

91.9

10


Portland, OR

102.3

24

North Virginia, Metro, DC

92.4

11


Los Angeles, CA

105.1

25

Seattle, WA

92.6

12


St. Louis, MO

105.3

26

Miami, FL

92.8

13


San Francisco, CA

106.6

27

Denver, CO

94.3

14





The total tax index is a measure of the total taxes paid by corporations in a particular location and industry, expressed as a percentage of total taxes paid by similar corporations in the United States baseline cities (New York City, Los Angeles, Chicago and Dallas-Fort Worth).  Thus the United States has a total tax index of 100.0, which represents the benchmark against which the other countries and cities are scored.

About KPMG LLP's Global Location and Expansion Services

KPMG LLP's Global Location and Expansion Services practice, with more than 50 U.S. professionals, offers a comprehensive range of expansion-based business services that help companies find tax and non-tax efficiencies when expanding, relocating or consolidating their facilities. The practice operates domestically and globally and is part of KPMG's State and Local Tax practice in the United States.

About KPMG LLP

KPMG LLP, the audit, tax and advisory firm (www.kpmg.com/us), is the U.S. member firm of KPMG International Cooperative ("KPMG International"). KPMG International's member firms have 145,000 people, including more than 8,000 partners, in 152 countries.

Contact:

Bridget Carroll/Robert Nihen


KPMG LLP


201-505-6501/201-307-8296


bccarroll@kpmg.com/rnihen@kpmg.com

SOURCE KPMG LLP



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