Startups Near State Lines Opt for Side With Lower Taxes, Study Finds


When startup businesses open near state lines, they will weigh the costs of taxes and opt for the state with lower sales and property taxes, according to economic research conducted by Iowa State University.

“Property taxes seem to matter more than other types of taxes,” according to Iowa State University Professor Peter Orazem, who led the study. He attributed this to the fact that new businesses will be required to pay property taxes even if they don’t generate any income. 

The researchers looked at how property, sales, personal income, and corporate income taxes affect the probability of startup companies jumping state borders to gain a competitive advantage over other startups.

By focusing on state borders, Orazem and his team were able to monitor “unobservable local factors” that also would contribute to a new business choosing its location. These factors can include strong local economies, better access to labor, and a supportive local business community.

More Devices Subject to State E-Waste “Fee” Starting July 1. More electronic devices will be subject to the state’s electronic waste recycling “fee” beginning July 1, the California Department of Tax and Fee Administration is reminding Californians.

The charge will be extended to the following electronic display devices that have a screen size of more than four inches measured diagonally: Organic light-emitting diode (OLED)-containing laptop computers; OLED-containing tablets; OLED-containing desktop monitors; OLED-containing televisions; Liquid crystal display (LCD)-containing smart displays; and LCD-containing tablets that are now under their own covered electronic device (CED) category. (Prior to July 1, tablets were categorized under the “LCD-containing laptop” category.)

The Department of Toxic Substances Control (DTSC) defines a smart display as a device that is intended for stationary use, has a built-in speaker and a video display screen measuring at least four inches when measured diagonally, and offers voice-activated, integrated virtual assistance to the user and interactive connections with other devices. The department’s website includes more information about the charge.