An article in yesterday's Washington Business, based on information supplied by the Greater Washington Board of Trade, incorrectly stated part of Fairfax County's tax policy. The article should have said that the county does not tax gross receipts from federal research and development contracts. Also, a bar graph accompanying the article reversed the retail tax burdens in Fairfax County and the City of Fairfax. It should have shown that the greater tax burden is in the county.

A business operating in the District or the City of Baltimore may pay more than twice as much in local taxes than it would in surrounding suburban counties and cities, according to a recently released report by the Greater Washington Board of Trade.

The District and Baltimore have the highest combination of state and local business tax burdens for each of seven types of companies examined in the report. Arlington, Stafford, Calvert and Frederick counties consistently have the lowest combined tax burdens on business, according to the study prepared by the Board of Trade, which acts as a regional chamber of commerce.

Local officials who work to attract new businesses to the District and Baltimore say the difference in tax burdens makes their jobs harder but can be overcome by other financial and non-financial incentives the cities can offer.

"I wouldn't want to underestimate the importance of the tax rate differential," said Bernard L. Berkowitz, president of the Baltimore Economic Development Corp. (BEDCO). "It's a tough obstacle to overcome in a lot of cases. . . . It makes us sweat."

Berkowitz also agrees with local companies and other local economic development officials who say that taxes are just one of many factors considered when a company decides where to do business.

"Taxes are a factor -- and an important factor -- but not the sole factor in terms of business location," said Kwasi Holman, executive director of the District's office of business and economic development.

A company's lobbying office may want to be close to legislators in the District, while a shipper may want access to the port in Baltimore. A defense contractor may choose to locate near the Pentagon in Arlington, while a biotechnology firm may prefer the biomedical resources of Montgomery County, economic development officials said.

Businesses also must consider factors such as the cost of buying land or leasing office space, the availability of financing, the qualities of the available labor pool, access to important markets -- and taxes.

The Board of Trade, which works with local jurisdictions to attract new businesses, publishes the annual tax report to provide information on how local tax rates vary.

The board prepares the report by gathering information on business tax rates from 19 local jurisdictions, including taxes on income, property, sales or use, and utilities, as well the costs of providing for unemployment compensation. The tax rates then are used by a certified public accounting firm to determine the hypothetical tax burdens in each jurisdiction on seven types of companies, including a retailer, a manufacturer, a wholesaler, a research and development firm, a lessor of commercial or industrial property, the regional headquarters of an out-of-state-company operating in its own building and a regional headquarters of a company leasing office space. The tax burdens calculated represent a combination of state and local liabilities.

For comparative purposes, the study uses hypothetical companies modeled on certain assumptions, such as the amount of net income and gross receipts, the amount of space used and the costs of using such space, payroll expenses, utility expenses and other details of business operations.

For example, several jurisdictions tax equipment and furniture as personal property. For six of the model companies (all except the lessor of commercial or industrial property), the study assumes that a company has equipment and furniture with a total value of $100,000, which is subject to personal property tax. The study also assumes that $10,000 worth of that property was purchased during the current year and is therefore subject to sales tax.

The study also details the ways the different jurisdictions tax different items. For example, Maryland localities and the District do not tax the gross receipts of any of the types of companies in the study. Virginia jurisdictions are not allowed to tax the gross receipts of manufacturers. Fairfax does not tax gross receipts of federal government contracts, while Alexandria exempts gross receipts from research and development.

The assumptions and tax rates then are combined to produce models that illustrate the varying tax burdens. For example, the model retail corporation of the study earns $200,000 in net income on sales and has gross receipts of $8 million. It owns land and a building valued at $3 million, which is taxed as real property. It reports utility expenses of $1.8 million a year and payroll expenses of $1 million.

This mythical company would pay $112,400 in state and local taxes if based in the City of Baltimore, or more than twice the $54,400 in taxes it would pay in Calvert County, the report shows. In the District, the retailer would pay $95,000 in taxes. It would face the third-highest state and local tax burden in Alexandria, at $84,600. A retailer would incur the lowest local taxes in Calvert, Frederick, Stafford and Loudoun, according to the Board of Trade's models. Rates Vary for Firms

Five of the seven companies in the report would pay the highest state and local taxes in the City of Baltimore, and two would pay the highest taxes in the District. Five of the hypothetical companies would pay the second-highest taxes in the District, while two would pay the second-highest taxes in Baltimore. Baltimore County, the City of Alexandria and Prince William County each rank third in two cases.

Three of the hypothetical companies pay the lowest combination of state and local business taxes in Calvert County. Stafford County, Frederick and Arlington have the lowest business tax burdens in several cases examined in the report.

Calvert County companies pay the lowest real property taxes in every category, followed by Arlington and the City of Falls Church.

The study does not compare the services provided by the local jurisdictions, nor the tax bases upon which they draw.

But officials in Baltimore and the District are quick to point out that they must provide assistance to a larger proportion of lower income residents. The District also must provide city services as well as those normally provided by a state government, such as courts and corrections, welfare programs, health care and a "state" university.

The cities often are able to offset the tax disadvantages through a variety of financing tools, said BEDCO's Berkowitz.

BEDCO can offer a company tax savings if they locate in state enterprise zones or attractive financing for sites at city-owned industrial parks. One of the most powerful tools has been the federal Urban Development Action Grant (UDAG), which has provided cities with grant money that they then can lend on a long-term basis at below-market rates, Berkowitz said. But last week the Reagan administration decided to stop accepting UDAG applications for the rest of this fiscal year as part of the effort to cut federal spending.

The cities also can offer access to a larger labor pool, an inventory of existing, "relatively cheap" space in older buildings, access to a larger number of suppliers and services, and some other special features such as Baltimore's port, Berkowitz said. D.C. Touts Advantages

The District's economic development office targets companies "for whom a D.C. address is important," such as businesses related to tourism and the government, Holman said. Forty-four companies out of the top 50 listed in the Fortune 500 have offices in the District for quick access to legislators and federal regulatory agencies, he said.

The cities also argue that they compete with other cities more than with the outlying suburbs. For example, United Press International, the global news service, saved money by moving its corporate headquarters to the District from New York City in early 1984.

UPI, which was financially troubled at the time and now is reorganizing under Chapter 11 of the federal bankruptcy code, was paying much higher rent for its Manhattan offices and was having trouble persuading employes to work in New York because of the cost of living, said UPI spokesman William K. Adler. The wire service chose a District address because it wanted to consolidate operations and knew it always would need a large news staff in Washington to cover the nation's capital, Adler said.

UPI's move did not save any money in taxes, however, because the company was losing money and was not liable for income taxes, said Jack Kenny, UPI's senior vice president and treasurer.

For other reasons, "taxes were not a factor" in Otsuka Pharmaceutical Co. Ltd.'s decision to build a biomedical research facility in Montgomery County, said William M. McHale, now director of Otsuka's Seattle office, who was closely involved in the move to Montgomery County.

The Japanese pharmaceutical giant chose Montgomery County after considering San Diego, Boston, Long Island, Seattle and other areas with large concentrations of biomedical companies, scientists and research programs. The company never considered other local jurisdictions in the Washington area, and thus never compared local tax rates, because no other local municipality has the public and private biomedical resources of Montgomery County, he said.