Friday, May 25, 2018
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Ohio leaps to No. 2 on list of best business climates

Ohio has zoomed to near the top of a well-regarded list of states that have the most favorable conditions for doing business.

The list by Site Selection magazine, which is the preferred publication of economic development and site selection professionals, places Ohio at No. 2 on its 2012 list of Top State Business Climate Rankings. In the 2011 rankings, the Buckeye State placed ninth.

Site Selection used six criteria to determine the overall list, on which North Carolina rose to the top from No. 3 in 2011. The six criteria are a state’s ranking in a separate survey of business executives; a state’s competitiveness; its standing in new manufacturing plant start-ups in 2011; new plant start-ups in 2012 from January through August; tax rates for mature businesses; and tax rates for new businesses.

Ohio was ninth in the executive survey, third in competitiveness, first in 2011 plant start-ups, eighth in 2012 plant start-ups, fifth in tax rates for mature firms, and third in taxes for new firms.

Of the Top 10 states in this year’s rankings, Ohio was the only northern state. Ohio also won the magazine’s Governor’s Cup this year for the most new projects announced by any state in 2011, according to a Site Selection analysis.

Dean Monske, president of the Regional Growth Partnership in Toledo, said Ohio’s climb to the No. 2 spot is no surprise because it enacted tax changes in 2005 that have been beneficial in luring business to the state ever since.

“This is something we’ve been touting for five years,” Mr. Monske said. “In 2005, when we changed the way we tax, it really did change things overnight for businesses and how they reacted. The tax reform in Ohio has lowered the tax burden by half.”

As an example, Mr. Monske cited the state’s Commercial Activity Tax (CAT): “As a manufacturer in Ohio, if you ship most of that product out of Ohio, you have almost no CAT tax. That makes Ohio a great place to do business from a tax perspective.”

Also, a new report by the Quantitative Economics and Statistics Practices of accounting firm Ernst & Young recently ranked Ohio third in the nation for friendliest tax environment. The study, “Competitiveness of State and Local Business Taxes on New iInvestment,” provided a state-by-state comparison of tax liabilities and found Ohio’s lowest effective business tax rate was just 4.4 percent.

“Those are the kinds of things, to me, that are really the credible sources,” Mr. Monske said of the Site Selection rankings and the Ernst & Young report.

“We tout this stuff when we go overseas,” he added.

Contact Jon Chavez at: or 419-724-6128.

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