SBE Council Ranks the 50 States in “Small Business Policy Index 2014”

By at 11 December, 2014, 11:03 am

The 19th annual Small Business Policy Index measures the policy environment in the states as to how policies impact entrepreneurship, investment and small business growth.

Small Business Policy Index 2014 measures the  environment in each state as to how policies impact entrepreneurship, investment and small business growth.

How Do States Rank on Small Business Policy Friendliness?                      

Washington, D.C. – Today, the Small Business & Entrepreneurship Council (SBE Council) released its 19th annual “Small Business Policy Index 2014: Ranking the States on Policy Measures and Costs Impacting Small Business and Entrepreneurship.”

The Index, which SBE Council has published for 19 years, ranks the 50 states according to 42 different policy measures, including a wide array of tax, regulatory and government spending measurements.

“Policies clearly affect the environment for investment, entrepreneurship and small business growth. In order to compete for capital, business and human capital, many Governors and state legislatures are pushing forward with policies to improve their tax and regulatory climates. This competitive policy environment is a big plus for small business. States like Arizona, Indiana, Kansas, New Mexico, North Carolina, North Dakota, and Ohio have really stepped up their game on the policy front. In each of these cases, tax reform and relief were undertaken, which reduces the costs of risk taking and doing business. Meanwhile, top-tier policy states like Texas, Nevada, South Dakota, Florida and Wyoming continue to leverage their long-standing policy advantage, and are doing things to get better,” said SBE Council President and CEO Karen Kerrigan.

The most entrepreneur-friendly states under the “Small Business Policy Index 2014” are: 1) South Dakota, 2) Nevada, 3) Texas, 4) Wyoming, 5) Florida, 6) Washington, 7) Alabama, 8) Indiana, 9) Colorado, 10) North Dakota, 11) Ohio, 12) Arizona, 13) Utah, 14) Michigan, and 15) Virginia.

In contrast, according to the Index, the most negative policy environments for entrepreneurs are: 40) Rhode Island, 41) Connecticut, 42) Maine, 43) Iowa, 44) Oregon, 45) Vermont, 46) Minnesota, 47) Hawaii, 48) New York, 49) New Jersey, and 50) California.

The “Small Business Policy Index 2014” can be read and downloaded here, with an interactive map on SBE Council’s website here.

Raymond J. Keating, SBE Council’s chief economist and author of the study, noted, “The Small Business Policy Index provides the most comprehensive comparison of state policies that affect entrepreneurship, small business and investment. And make no mistake, tax, regulatory, government spending and other governmental performance and cost measures matter state by state. Consider that when it comes to economic growth, population growth, and shifts in population among the states, for example, the top 25 states on the Index perform, on average, far better than the bottom 25 states.”

Keating added, “As for the best policies, it must be noted that five (South Dakota, Nevada, Texas, Wyoming, and Washington) of the top six states on the Index impose no income taxes whatsoever, that is, no personal or corporate income and capital gains taxes. And the other state in the top six (Florida) has no personal income or individual capital gains taxes. Clearly, enhancing the incentives for entrepreneurship and investing by not taxing the returns on such critical activities makes for sound, pro-growth, pro-entrepreneurship policymaking.”

Small Business Policy Index 2014

Rank            State                  SBPI

1            South Dakota             35.378

2            Nevada                        36.628

3            Texas                           38.562

4            Wyoming                    46.668

5            Florida                         49.109

6            Washington               52.010

7            Alabama                     59.036

8            Indiana                       62.646

9            Colorado                     62.754

10          North Dakota           63.134

11            Ohio                          63.736

12            Arizona                    63.755

13            Utah                          64.555

14            Michigan                 64.720

15            Virginia                    66.771

16            Mississippi              68.045

17            South Carolina       69.218

18            Alaska                      69.933

19            Georgia                     70.628

20            Louisiana                71.806

21            North Carolina       72.034

22            Kansas                     72.068

23            Missouri                  73.570

24            Oklahoma               74.082

25            Tennessee               75.436

26            New Mexico            76.843

27            New Hampshire    77.935

28            West Virginia        78.587

29            Pennsylvania         78.700

30            Wisconsin              81.594

31            Massachusetts       82.169

32            Delaware                 82.505

33            Montana                  83.027

34            Idaho                        83.092

35            Illinois                     84.764

36            Kentucky                  84.952

37            Arkansas                 85.457

38            Maryland                86.461

39            Nebraska                 91.083

40            Rhode Island         91.891

41            Connecticut             94.919

42            Maine                       96.638

43            Iowa                          97.209

44            Oregon                     97.395

45            Vermont                   102.754

46            Minnesota               105.913

47            Hawaii                     105.922

48            New York                107.393

49            New Jersey              112.529

50            California                118.454


CONTACT:  Raymond Keating,



SBE Council is a nonpartisan, nonprofit advocacy, research and education organization that works to protect small business and promote entrepreneurship. For more than twenty years, SBE Council has worked to advance policies and initiatives that help to strengthen the ecosystem for U.S. entrepreneurship. Please visit: Twitter: @SBECouncil

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