Business Cost Comparisons

The examples below represent annual costs for an Oregon manufacturing firm looking to reinvest and possibly expand but potentially needing to relocate.

Small Business Example

  • 20 employees
  • $2 million in real property
  • $6 million in equipment
  • Sells some of its product in-state
  • 5% gross profit margin
  • Consumes 125,000 kWh electricity per month; 7,800 kcf natural gas per year
 20-Employee Firm, Urban Location1 Oregon   California Idaho   Washington 
 Energy costs $132,102 $210,282 $131,238  $129,048 
 Employee gross payroll $1,062,600 $1,064,080 $965,380 $1,209,900 
 Payroll taxes/insurance2 $191,209 $238,637 $184,177 $247,275 
 Corporate income or gross receipts taxes1 $5,937 $13,552 $5,328 $19,344 
 Property tax $141,360 $74,080 $102,960 $59,360 
 Other taxes3 $0 $15,183 $12,050 $53,295 
 Tax on capital purchases (first year only) $0 $180,860 $18,000 $204,240 
 Total operating costs, initial capital taxes $1,533,208 $1,796,674 $1,419,182 $1,922,692 
 Difference from Oregon
+ $263,466 ($114,076) + $389,484 

Larger Business Example

  • 200 employees
  • $20 million in real property
  • $60 million in equipment
  • Sells most of its product out-of-state
  • 10% gross profit margin
  • Consumes 1,250,000 kWh electricity per month; 78,000 kcf natural gas per year
 200-Employee Firm, Rural Location1 Oregon   California Idaho Washington 
 Energy costs $1,232,520 $1,946,670 $1,223,730 $1,221,180 
 Employee gross payroll $10,626,000 $10,640,800 $9,653,800 $12,099,000 
 Payroll taxes/insurance $876,289 $775,152 $735,856 $1,037,365 
 Corporate income or gross receipts taxes1 $47,495 $108,415 $69,241 $193,438 
 Property tax $718,400 $629,600 $978,400 $762,400 
 Other taxes3 $0 $151,833 $120,499 $532,954 
 Tax on capital purchases (first year only) $0 $1,808,600 $180,000 $2,044,700 
 Total operating costs, initial capital taxes $13,500,704 $16,061,070 $12,961,526 $17,891,037 
 Difference from Oregon
+ $2,560,366 ($539,178) + $4,390,333 

1 Location affects estimators only for property taxes.

2 Payroll taxes include federal Social Security & Medicare, but not local levies.

3 "Other taxes" includes any relevant business tax that would apply to the business scenario used in the example, including state franchise taxes or sales & use taxes on current purchases.

This analysis, which is for illustrative purposes only, can be replicated for other states and examples, but it relies on a number of scenario assumptions, and actual results will vary. These rough approximations, based as they are on current interstate data, are under no circumstances warranted for investment or tax planning or any other reason, and as such, should not be used as the basis of any decision with financial or other consequence. Be sure to contact a tax professional tax advisor regarding any tax-related questions you may have.