Businesses differ in their response to state tax policy. Mature firms may face different tax challenges than do start-ups. Manufacturers, retailers, and R&D firms also have varying concerns when it comes to the way state taxes affect them. A new study by the Tax Foundation offers new guidance to business owners and policymakers who want to understand how tax policy drives business decisions.

Earlier, we reported on the Tax Foundation’s business tax climate study, which found Washington had the nation’s 7th best business tax climate. The new report adds important context. Here’s the bottom line for our state:

Washington ranks 17th overall for mature operations and 40th overall for newly established operations.

Specifically:

• For mature operations, Washington ranks fourth for both retail stores and call centers.  The total tax burden for retail is 28 percent below the national average, and the total tax burden for call centers is 33 percent below the national average.  The main driver is that Washington is one of only four states without an income tax at either the state or local level…

• By contrast, Washington ranks 46th for the mature corporate headquarters, which has a total tax burden 42 percent above the national average. While this operation has the nation’s lowest income tax costs and second-lowest property tax burden, it also has the highest sales tax costs and among the highest costs for unemployment insurance (UI).

• For new operations, Washington ranks 17th for retail stores, which have a total tax burden that is 8 percent below the national average.  The state’s low income tax and property tax costs are key factors.

• Washington ranks 49th for new corporate headquarters, which have a total tax burden 81 percent above the national average.  Again, while this firm has one of the lowest property tax burdens in the nation, it has the highest sales tax burden in the nation combined with above-average UI costs and the gross receipts tax.

Go to page 162 of the full report for Washington state details. The press release is here and a video of TF president Scott Hodge on Fox Business is here.

Tax Foundation worked with KPMG LLP, a global tax, audit, and consulting firm, to produce the report.

UPDATE Here’s the link to the two-page Washington summary.