Cincinnati Named America’s Most Cost-Friendly City

The KPMG study assigned Cincinnati a cost index of 94.0, representing business costs 6.0% below the national baseline of 100. Based on KPMG’s data, Cincinnati has the lowest property-based taxes and industrial facility lease costs, and second lowest industrial land and salary costs. Ohio tax credits applicable to video game production help reduce the effective tax rate for the digital services sector, which also contributed to Cincinnati’s top ranking in the study, the consulting firm said.

The study measured 26 key cost components in each market, including costs associated with taxes, labor, facilities, transportation and utilities, as they apply to seven different business-to-business service sector operations and 12 different manufacturing sector operations.

Orlando, Fla., was the second most cost-competitive location in the large-cities category, followed by Tampa, Fla., Cleveland, San Antonio and Atlanta. Other locations ranked among the top 10 large U.S. cities included Charlotte, N.C., Miami, St. Louis and Kansas City, Mo.

Unlike lower-cost cities, San Francisco and New York represent the most expensive large U.S. cities in which to do business, with cost indexes of 104.5 and 104.7, respectively. Despite many cost disadvantages, San Francisco has below-average costs for natural gas and property-based taxes. New York City has the second lowest transportation costs among the 31 large U.S. cities. New York City’s effective corporate income tax rate is also relatively low, ranking sixth among the larger cities studied and benefiting from substantial state and city tax reforms enacted in the last two years.

Ohio, Cincinnati’s parent state, ranked 22nd out of 50 in Chief Executive’s 2015 Best & Worst States for Business. At the time (May 2015), CEOs praised Gov. Kasich’s aggressive income tax cuts, as well as the recent job growth the cuts had created. They also were impressed with Ohio’s high quality workforce and strong living environment. Every year, CEOs rate Best & Worst States for Business on three key factors: taxation, living environment and workforce quality.

The complete 2016 global study is available online at www.competitivealternatives.com.