We should note that business susceptibility to local taxes does vary by industry. Office tenants with gross-rate leases, for example, are less likely to pay directly for property taxes than retail tenants with net leases. Similarly, a manufacturing plant filled with machine tools will likely care more about electric bills and taxes than a customer call center, which will be more concerned with the local telephone tax. However, our ratings provide an overall view of tax liability among communities, and identify the expensive places where businesses should be wary of high costs. Five of the eight High Cost cities are in Arizona, Oregon and Washington.
Property taxes tend to be substantially higher outside California.
Voters in Oregon, apparently concerned about increasing taxes, recently placed controls on property taxes similar to Proposition 13. Among the four other states included in the Survey, only Nevada has property tax rates that are competitive with California. Modesto has a utility tax cap that would make it a Low Cost city for larger companies. Within California, some patterns are apparent between the north and south. The highest business tax rate in the state is charged in San Francisco, where the average among non-property categories is 0.628 percent of gross receipts.