The Small Business & Entrepreneurship (SBE) Council annually ranks US States on how friendly of a business climate they provide. By choosing a state in which policy is business friendly, you can improve you odds for success for your small business.
The Small Business & Entrepreneurship Council’s “Business Tax Index 2010” ranks the states from best to worst in terms of the costs of their tax systems on entrepreneurship and small business. The Index pulls together 16 different tax measures, and combines those into one tax score that allows the 50 states and District of Columbia to be compared and ranked.
The 16 measures are: 1) state’s top personal income tax rate, 2) state’s top individual capital gains tax rate, 3) state’s top corporate income tax rate, 4) state’s top corporate capital gains tax rate, 5) any added income tax on S-Corporations, 6) whether or not the state imposes an alternative minimum tax on individuals, 7) whether or not the state imposes an alternative minimum tax on corporations, 8) whether or not the state’s personal income tax brackets are indexed for inflation, 9) property taxes, 10) consumption-based taxes (i.e., sales, gross receipts and excise taxes), 11) whether or not the state imposes a death tax, 12) unemployment taxes, 13) whether or not the state has a tax limitation mechanism, 14) whether or not the state imposes an Internet access tax, 15) gas tax, and 16) diesel tax.
10 Best States for Small Businesses in 2010
According to the study results, these states ranked highest for small business entrepreneurs:
- South Dakota (Best)
- Texas
- Nevada
- Wyoming
- Washington
- Florida
- Alabama
- Alaska
- Ohio
- Colorado
10 Worst States for Small Business
Here are the 10 states that ranked the lowest in the 2010 results, meaning they are considered the least favorable for small businesses entrepreneurs when it comes to public policy issues, including tax treatment:
- Massachusetts
- Oregon
- Vermont
- Iowa
- Maine
- New York
- California
- Minnesota
- New Jersey
- District of Columbia (Worst. Also worst in 2008 and 2009.)
Complete rankings of all the states for 2010 and details on how they ranked in each category are available at: http://www.sbecouncil.org/uploads/BTI2010_2.pdf
Results for Prior Years
If You Could Live Anywhere, Where Would it Be?
Tax implications of where you live are just one piece of the puzzle. You'll want to love where you're living and reasons differ for everyone. If you are a full-time telecommuter or home business entrepreneur, you may have the luxury of being able to live wherever you want. Where would that be?
Readers respond: Where are the Best Places to Live?