Monday, April 14, 2008

Why Arizona Might Be A Good Place for Franchising

Kathleen Connell, PhD, a professor at Haas Business School at the University of California, Berkeley thinks that if you are burdened by taxes, city and state tax codes differ to such an extent that location should be something worth considering. According to this article, "The amount of variation is striking. Families earning the same income experience significant differences in the tax burdens they shoulder, depending on where they live." With respect to Arizona, she mentions that: "The bordering states of Arizona, California, and Nevada also create tax opportunities for residents who may choose to work in California, but reside in the lower tax states of Arizona or Nevada. Check out your state's competitive position at the website of the Tax Foundation (, a Washington-based nonprofit group." This may have little to do with the business tax consequences for the franchisor, but it may impact the decision franchisees make in determining the appeal of an Arizona or California Franchise that has individual tax appeal. "For relocating retirees, however, the tax profile of a community emerges as a primary consideration. Smart retirees seek communities with the lowest income, property, and sales taxes – levies that can add up to significant expenses on a retirement budget."

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