Before the Tax Cuts and Jobs Act was enacted in December 2017, many Fortune Global 500 companies had moved their headquarters outside the United States due to the approximately 39 percent rate of statutory corporate income tax. Since the enactment of the TCJA, the top combined federal-state rate has been lowered to 25.8 percent. Many other factors can affect a company's choice of headquarters location, such as a country's regional economic growth and stability, local infrastructure, regulatory environment, labor availability and productivity, transportation and other input costs, and tax policies.
Industry composition of Fortune Global 500 companies. FG500 companies are categorized into eight industries and compared by the industry distribution change between 2000 and 2022. In 2022, 22% of FG500 companies were in the financial and professional services industries, which include banks and insurers. The following industries also experienced declines in their shares of FG500 companies: retail and consumer products; energy, utilities, and chemicals; industrial products; and "other," which is a catch-all category. However, there were increases in technology, communications and entertainment; wholesale/trade; and natural resources.
Location of FG500 headquarters within the U.S. In 2022, 25 percent of the FG500 headquarters were in the U.S. The four U.S. states with the most FG500 headquarters are: New York, Texas, California, and Illinois. These states account for 46 percent of the 124 total FG500 headquarters located in the U.S. Company headquarters' locations have been in flux for the past 20 years. Historically, location changes reflect a variety of factors, including tax considerations, the rise and fall of national economies, changes in financing arrangements, merger and acquisition activity, changes in transportation and production technologies, changes in supply chains, and changes in consumer tastes, to name a few. However, due to the pandemic, the resulting global economic uncertainty, and governments' economic and tax policy responses, there is more complexity to where the top FG500 company headquarters are located. Industry groups and policymakers need to be keenly aware of the many factors that can play into headquarters location decisions and consider the implications of significant shifts of large headquarters into or out of their local economies.
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