Finally, there's good news for companies that have felt bombarded by state- and local-tax increases. A recent survey of 505 companies by Coopers & Lybrand indicates that those increases have leveled off. But if your company has upgraded its local-tax expertise, your decision should still pay off. Coopers & Lybrand expects federal funding cuts to result in steep local-tax hikes in the next few years. Meanwhile, there's the risk of local-tax audits.

How did your state- and local-tax liability in 1994 compare with 1993?

Stayed the same 51%

Increased 42%

Decreased 7%

What are your expectations for 1995's state- and local-tax rates?

Stability 58%

Increase 28%

Decrease 14%

Were you audited last year on a state- or local-tax matter?

Yes 81%

No 19%

Source: "Third Annual Corporate Survey of State and Local Taxes," Coopers & Lybrand, New York City, March 1995.

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