Businesses paid over $688 billion in state and local taxes in fiscal year 2014, a level 2.2% higher than the prior fiscal year, according to a study prepared by Ernst & Young LLP in conjunction with the Council On State Taxation.

The annual study, titled "Total State and Local Business Taxes: State-by-State Estimates for Fiscal Year 2014," shows that state business taxes grew less quickly than local taxes, with state taxes growing 1.5% compared to local tax growth of 3.1%. In FY2014, business tax revenue accounted for nearly 45% of all state and local tax revenue, a number consistent with prior years' results.

"Growth in tax revenue from business was concentrated in property taxes, sales taxes and corporate income taxes," said Andrew Phillips, Principal in the Quantitative Economics and Statistics Practice of Ernst & Young LLP.

The state and local business tax estimates presented in the study reflect tax collections from all 50 states. These include business property taxes, sales and excise taxes paid by businesses on their input purchases and capital expenditures, gross receipts taxes, corporate income and franchise taxes, business and corporate license taxes, unemployment insurance taxes, individual income taxes paid by owners of pass-through entity businesses, and other state and local taxes that are the statutory liability of business taxpayers.

Key findings of the study include:

• Revenue from state and local business taxes increased from FY2013 to FY2014. Overall state and local business tax revenue increased 2.2%, with state business tax revenue growing by 1.5% and local business tax revenue growing 3.1%.

• Business property tax revenue grew 3.2% in FY2014, an increase of $7.8 billion to a total of $250.6 billion. Property taxes remain by far the largest state and local tax paid by businesses, accounting for 36.4% of the total.

• General sales taxes on business inputs and capital investment totaled $142.8 billion, or 20.7% of state and local business taxes. Overall sales taxes paid by business increased 4.3%.

• In FY2014, state and local corporate income tax revenue was $64.4 billion, or 9.4% of all state and local business taxes. FY2014 marked the fourth consecutive year of corporate income tax growth.

• Individual income taxes on pass-through business income accounted for 4.9% of total state and local business tax revenue. Individual income tax revenue on business income decreased 4.8%, the largest decrease of any tax in FY2014.

• On average, business taxes are equal to 4.6% of private sector gross state product (GSP), which measures the total value of a state's annual private sector production of goods and services. There is substantial variation, with ratios ranging from 3.4% to 11.5%.

• On average, businesses continue to pay more in state and local taxes than they receive in benefits. Businesses paid $3.35 for every dollar of government spending benefiting businesses, on average, assuming that education spending does not benefit local businesses. An alternate assumption, that half of education spending benefits local businesses, results in businesses paying $1.23 for every dollar of government spending benefiting businesses.

• Businesses paid 10.6% of their gross operating surplus (similar to net profits) in state and local taxes in 2014.

"The findings in the study will allow policymakers to evaluate state and local business tax burdens beyond corporate income taxes, and provides a clear picture of state and local taxes paid in each state," said Douglas Lindholm, President and Executive Director of COST.