Tax differences are not very important in a business' decision to locate in a particular region of the country, a report by the Advisory Commission on Intergovernmental Relations says.
But taxes can be the "swing" factor in making a choice between jurisdictions within a region, particularly in places like Washington metropolitian area, the group's study found.
The ACIR is a commission whose members are federal, state and local officials and private citizens.
"Regional differences in construction, energy, and labor costs are generally too large to be outweighed by any differences in state and local taxes or fiscal incentives," the reports states.
At the same time, it said state and local tax differences may become more important in the future, however, because of the prospects that energy-rich states will have so much revenue they can afford to make sharp cuts in levies on both businesses and individuals.
The ACIR also found that state and local business taxes relative to taxes on individuals have declined across the country, with particularly dramatic reductions in business property taxes.
The report's figures show that Maryland, Virginia and the District of Columbia all followed this trend, though the decrease in the District was small.
Business taxes relative to total tax burden declined from about 31 percent to 24 percent in Maryland between 1957 and 1977, from about 37 percent to 28 percent in Virginia during the same period, and from 34 percent to 32 percent in D.C.
This compares with a national business tax burden that declined from 37 percent to 1957 to 31 percent in 1977.