If you’re like most small business owners, you started your business and then found out about how much government bureaucracy you’d have to deal with. The reality of owning a small business is that there are many others who want a piece of the action. And it varies greatly by state.
So which states are low on taxes and light on government regulations? Take a look at these exclusive rankings provided by FSB.com from the Small Business & Entrepreneurship Council.
The rankings are derived from the SBE Council´s Small Business Survival Index, which is used to rate the 50 states and Washington, D.C. according to some of the major government-imposed or -related costs affecting investment, entrepreneurship, and business.
This year’s list from the SBE Council measures states on 29 criteria, including tax rates on income, property and capital gains; health-care regulations; crime rates; government spending; bureaucracy; and labor costs. The Index focuses only on public policy measures, so indicators such as workforce availability, education, or skill, or affluence of the population are not included. This year South Dakota topped the overall list, followed by Nevada (No. 2), Wyoming (No. 3), Alabama (No. 4), Washington (No. 5), Florida (No. 6), Mississippi (No. 7), Colorado (No. 8), Texas (No. 9) and Michigan (No. 10).
The places that scored lowest on the list are Washington, D.C. (No. 51), followed by New Jersey (No. 50), California (No. 49), Rhode Island (No. 48), Maine (No. 47), Minnesota (No. 46), New York (No. 45), Hawaii (No. 44), Massachusetts (No. 43), Vermont (No. 42) and Iowa (No. 41).
The states with the lowest tax burden on small business, according to the list are South Dakota, Nevada, Wyoming, Washington, Florida, Mississippi, Alaska, Alabama, Texas and Michigan.
Meanwhile, states with some of the lowest energy costs, include: Kentucky, followed by West Virginia, Missouri, Wyoming, Nebraska, Arkansas, North Dakota, Idaho, Indiana, South Carolina and Virginia. States were given an energy costs index score for FSB.com’s list based on electricity costs and gas prices. Gas prices are not part of the SBE Council’s Small Business Survival Index.
If you’re in the process of moving your business, or thinking about moving it, check out the full listing at the FSB website.