A tax practitioner who opposes the devil of tax complexity is a bit like the preacher who struggles against the forces of evil: we fight on the side of the angels, but Satan is good for business.That being said, some states are much worse than others. Run up to a corporate tax person and whisper "New York" and watch them scream in terror. In New York, a corporate taxpayer has to calculate four different tax bases in order to complete the return. Then, you take the highest of the four bases and pay that. Unless you have tax credits. Then you have to take the tax credits and then recalculate all the tax bases since not all tax credits reduce all the bases.
It's a nightmare that rivals California in complexity (I think the typical corporate tax accountant would just drop dead if you whispered "California"). In Governor Pataki's State of the State, and in his budget proposal for the 2006-2007 Fiscal Year, he has said enough is enough. He would eliminate three of the four tax bases and have New York corporate taxpayers calculate tax solely on net income. Halleujah!
He also has a national trial balloon in his address that will get shot down. He has put in a provision to immediately expense all fixed assets located in New York. This is a GOP pipe dream that they would like to see implemented at the national level. Unfortunately for Gov. Pataki it would be immediately challenged and probably thrown out on Constitutional grounds. You can't discriminate between in-state and out-state business.
It's not often I commend governing types for clear thinking and wherewithal. But in this case it's well deserved. Huzzah Governor Pataki! I hope more Governors take your lead (not to mention Congress).