Best and Worst States for Small-Business Taxation

Just as you recover from tax day, the Small Business & Entrepreneurship Council offers its analysis of the best and worst states when it comes to taxes.

The “Business Tax Index 2009: Best to Worst State Tax Systems for Entrepreneurship and Small Business,” ranks the 50 states and District of Columbia according to the costs of their tax systems for entrepreneurship and small business. The index pulls together 16 different tax measures and combines those into one overall tax score. Among the taxes included are income, property, death/inheritance, unemployment, and consumption-based taxes like gas and diesel levies.

“Taxes matter,” says SBE Council chief economist Raymond Keating. “They matter to

consumers, entrepreneurs, investors and businesses. They matter in terms of a state’s

competitiveness. And they matter when it comes to economic growth and job creation.”

Here’s the ranking, from the state with the best tax system down to the one with the worst, according to the report:

1 South Dakota

2 Nevada

3 Wyoming

4 Washington

5 Texas

6 Florida

7 Alaska

8 Colorado

9 Alabama

10 Ohio

11 South Carolina

12 Mississippi

13 Tennessee

14 Missouri

15 Oklahoma

16 Virginia

17 Arizona

18 Illinois

19 Georgia

20 Michigan

21 Delaware

22 Indiana

23 Arkansas

24 Utah

25 New Hampshire

26 Louisiana

27 New Mexico

28 Kentucky

29 Pennsylvania

30 Connecticut

31 Montana

32 Wisconsin

33 Kansas

34 Oregon

35 Maryland

36 North Dakota

37 Hawaii

38 North Carolina

39 West Virginia

40 Nebraska

41 Idaho

42 Massachusetts

43 Vermont

44 Rhode Island

45 Iowa

46 New York

47 California

48 Maine

49 Minnesota

50 New Jersey

51 Dist. of Columbia

Here’s the full report, which explains the 16 tax types that go into the scoring.

Readers, does your state fall where it should on the list? Have state taxes gotten out of hand where you live?

Photo: AP

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