Small Business Tip: Best ‘Business-Friendly’ Tax States

Tax rates matter to a small business owner or aspiring entrepreneur.  A new report examines the most ‘business friendly’ tax systems across the nation.  South Dakota comes out on top in the new analysis from the Tax Foundation. The Tax Foundation is a nonpartisan, nonprofit organization tracking federal, state and local taxes since 1937 and has released the 2010 State Business Tax Climate Index.

The annual analysis measures the competitiveness of the 50 states’ tax systems and ranks them accordingly based on the taxes that matter most to businesses and business investment: corporate income, individual income, property, sales, and unemployment insurance taxes.

The top 10 most business friendly states were South Dakota, Wyoming, Alaska, Nevada, Florida, Montana, New Hampshire, Delaware, Washington, and Utah.

The 10 least friendly are New Jersey, New York, California, Ohio, Iowa, Maryland, Rhode Island, Minnesota, Wisconsin, and Vermont.

Looking for a state I did not list?   The Tax Foundation has a slide show to accompany the report you can access with a click here.  There are many more tax resources online at

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