The Council on State Taxation released its annual report on business taxes. The research, conducted by Ernst & Young LLC, is the most comprehensive analysis available. The press release highlights document the lingering effects of the recession (data are for 2010).

Key findings of the study include:

After falling by 0.9% in FY2009, state and local business taxes stabilized at near FY2009 levels in FY 2010, decreasing by 0.3% from FY2009.

Total state and local taxes imposed on both households and businesses remained constant, with total state taxes declining by 1.2% and total local taxes increasing by 2.3%.

Property taxes on business property increased an estimated 1% this year, totaling $249.5 billion in FY 2010, or 40.3% of state and local business taxes.

Sales tax on business inputs and capital equipment totaled $124.4 billion, representing 20.1% of business taxes – a decrease of 2.5% from FY2009.

Corporate income tax collections totaled $44.1 billion, adding up to only 7.1% of state and local business taxes, and the lowest share reported in the nine-year history of this study.

Due to the decline in income taxes, indirect taxes (taxes not based on income) represent 88% of the total state and local tax burden, a larger share than in previous years.

Employer contributions to unemployment insurance were $32.4 billion, up 3.1%.

States are facing large debts to the federal government for loans used to pay unemployment benefits due to a combination of underfunding and the severity of unemployment. Unemployment taxes are likely to continue to rise for several years to cover loan repayments.

COST finds that state and local business taxes in Washington amount to 5.4 percent of Gross State Product, significantly higher than the US average of 5.0 percent. In Oregon the share of GSP is 3.8 percent. In Idaho, 4.3 percent.