“Small Business Tax Index 2017” Ranks the States from Best to Worst

By SBE Council at 21 June, 2017, 10:00 am

FOR IMMEDIATE RELEASE 

Contact: Raymond J. Keating

631-909-1122 or rkeating@sbecouncil.org

How Small Business Friendly is Your State?

Washington, D.C. – With 46 of the 50 states beginning new fiscal years on July 1, the Small Business & Entrepreneurship Council (SBE Council) today published the “Small Business Tax Index 2017: Best to Worst State Tax Systems for Entrepreneurship and Small Business.” The study ranks the 50 states according to the costs of their tax systems for entrepreneurship and small business.

Raymond J. Keating, chief economist for SBE Council and author of the report, said: “While there is much discussion in Congress and the Trump administration about making the federal tax system more competitive, these issues obviously reach down to state and local levels as well. That’s the focus of SBE Council’s ‘Small Business Tax Index 2017.’ Specifically, which states are among the least burdensome in terms of taxes, and which inflict the weightiest burdens on small businesses?”

For an interactive U.S. map of “Small Business Tax Index 2017” results, please click here.

SBE Council’s “Small Business Tax Index 2017” pulls together 26 different tax measures, and combines those into one tax score that allows the 50 states to be compared and ranked. Among the taxes included are income, capital gains, property, death, unemployment, and various consumption-based taxes, including state gas and diesel levies.

According to the “Small Business Tax Index 2017,” the 10 best state tax systems are: 1) Nevada, 2) Texas, 3) South Dakota, 4) Wyoming, 5) Washington, 6) Florida, 7) Alabama, 8) Ohio, 9) North Carolina, and 10) Colorado.

The bottom 10 include: 41) Connecticut, 42) Oregon, 43) New York, 44) Vermont, 45) Hawaii, 46) Iowa, 47) Minnesota, 48) Maine, 49) New Jersey, and 50) California.

Since last year’s report, several states have made significant tax changes.

States that have improved their tax environments

Five states – Arizona, Indiana, New Hampshire, New Mexico, and North Carolina – have improved their tax climates by reducing their personal or corporate income tax rates. Other states – such as New Mexico and Tennessee – have scheduled changes that will improve their tax climates for entrepreneurship, business and investment in coming years. Unfortunately, all of the news is not good. Kansas, Maine and New York have made tax changes that are negatives.

Keating explained: “In the end, if the state’s tax burden is light on economic risk taking, then that will be good news for entrepreneurship, businesses, investment, economic and income growth, and job creation in each state.” In fact, this year’s report includes an “Economics of Taxation” section that provides a look at assorted studies on the impact of taxation, and they support the economic foundation upon which this study largely rests.

This year’s full “Small Business Tax Index” rankings are as follows:

A PDF Copy of Small Business Tax Index 2017 can be accessed here.

SBE Council is a nonpartisan, nonprofit advocacy, research and education organization that works to protect small business and promote entrepreneurship. For nearly 25 years SBE Council has worked to successfully implement a range of policy and private sector initiatives to strengthen the ecosystem for startups and small business growth. To learn more, visit SBE Council’s website: www.sbecouncil.org. Follow on Twitter: @SBECouncil

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