The best–and worst–states for small biz
Ask small-business owners about their top concerns, and taxes are sure to be near the top of the list. Among the top tax-related issues for the National Federation of Independent Business, for instance, are repealing the alternative minimum tax, repealing the estate tax, and making the Bush administration's temporary tax cut permanent.
But state taxes are a big factor, too. Which states have the best tax environment for business? Depends how you figure it, of course. But one group, The Tax Foundation, crunched the numbers recently. According to its report, the states that are most friendly to business "levy low, flat rates on the broadest bases possible, and they treat all taxpayers the same. Variation in the tax treatment of different industries favors one economic activity or decision over another." The foundation's rankings reward the states that apply these principles in five areas of taxation: individual income taxes, major business taxes, sales taxes, unemployment insurance taxes, and taxes on wealth or assets such as property.
By those criteria, Wyoming turns out to be the most favorable state to do business in. Here are the top 5, followed by each state's current unemployment rate:
1. Wyoming (3.3 percent)
2. South Dakota (3.5 percent)
3. Alaska (7.0 percent)
4. Florida (3.2 percent)
5. Nevada ( 3.8 percent).
The bottom 5:
46. Vermont (3.5 percent)
47. Ohio (5.3 percent)
48. Rhode Island (5.1 percent)
49. New Jersey (4.7 percent)
50. New York (4.7 percent).
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