Philadelphia

I love Philadelphia. The City of Brotherly Love has an indescribable vibe that I have yet to find elsewhere. Tax-wise, however, the vibe is not there. From MSNBC (via Philadelphia Business Journal):

Philadelphia's tax burden also played a large role in AAA Mid-Atlantic's decision to relocate its headquarters to Wilmington and its information technology operations to Mount Laurel, N.J., despite being offered tax incentives to stay, spokeswoman Catherine Rossi said.

"While the tax incentives was a strong consideration, AAA looked at a number of other factors that swayed the decision to move from Philadelphia to Delaware," Rossi said.

In Wilmington, AAA Mid-Atlantic no longer pays a business privilege tax and its city wage tax has dropped from the roughly 4 percent workers paid in Philadelphia to 1.25 percent, she said.

In addition, its corporate net income tax has dropped from 9.99 percent, paid in Pennsylvania, to 8.7 percent in Delaware. Also AAA Mid-Atlantic no longer faces Pennsylvania's 6 percent sales tax and the additional 1 percent for taxable items bought in Philadelphia.

Wilmington also has no corporate stock franchise tax, which was paid at a rate of 0.00699 percent on assessed value in Pennsylvania, although a 1.92 percent tax on lease-related items is imposed in Wilmington, Rossi said.

If you read the entire article, you will come across all sorts of taxes that are thrown at Philadelphia businesses: corporate stock franchise taxes, wage taxes, a business privilege tax (is this saying "We're doing to tax you for the privilege of doing business in Philadelphia"?), an alternative tax on capital, to name a few. It's a very confusing area. It would be naive to think that a one-time incentive would serve as a gateway to investment.