Tax Structures of Kansas and Nearby States: Part 2, Hypothetical Firm Study

Abstract

Total tax liabilities have been calculated for hypothetical firms in nine industries for each of six states in the region, Kansas, Colorado, Iowa, Missouri, Oklahoma, and Nebraska. Federal taxes have been included in total taxes because of state and local tax payments, which differ across regions, affect federal taxable income. The states have then been ranked according to the total taxes a firm would pay in each of the states. The study concludes that for all of the industries analyzed, Missouri firms would pay lower taxes than firms in the corresponding industries in other states in the region. This is due to a combination of low Missouri tax rates and generous enterprise zone credits. In a ranking based on all industries, Kansas places third lowest among the states.