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  • Writer's pictureAIM Team

McCarty talks tax impact on economic development at national conference

Photo credit: Kristen Sanocki, Thompson Coburn LLP

On June 25, 2024, Ray McCarty, president and CEO of Associated Industries of Missouri, spoke at a national conference for tax professionals about the criteria that site selectors take into account when choosing locations for new or expanded company operations.

The conference was hosted by the Institute for Professionals in Taxation (IPT), a national group committed to advancing the professionalization of members by providing comprehensive education and certification for state and local tax professionals.

Site selectors are often hired by businesses looking to open new locations. McCarty used two different surveys of these site selectors to inform the group about the most important factors they consider when evaluating potential locations, including:

  • Effective tax rate and tax base;

  • State and local tax incentives;

  • Non-tax issues such as tort environment, whether a location is in a "Right to Work" state, qualified workforce availability, energy cost and availability, quality of life issues (i.e. housing, daycare, etc.) and transportation infrastructure; and,

  • Newer criteria such as Environmental Social Governance (ESG) ratings and state legislative efforts that prohibit or restrict Diversity, Equity and Inclusion (DEI) programs by businesses locating within the state.

Tax policy and incentives ranked in the top three of criteria used by site selectors in both surveys.

"When comparing states, one should not focus solely on tax rate charts," said McCarty. "Equally important is the tax base against which the rate is applied. But even more important than either of those factors is the business-friendliness of the tax administration agency in the state. It is one thing to have a competitive rate and tax base, but tax administrators can destroy the state's ability to attract businesses if they do not fairly administer the tax laws," he said.

McCarty pointed out comparing states is also complicated because states that appear low in one type of tax are often higher in other tax types. "Government rarely does without and usually gets paid by businesses one way or another," he said.

McCarty relied on data from a variety of sources, including the Council on State Taxation (COST), Ernst and Young LLP, National Conference of State Legislatures (NCSL), and others for his presentation.

If you would like to learn more or receive the complete presentation, please contact Ray McCarty at



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