NEW REPORT: SBE Council Ranks 50 States According to Public Policy and Tax Climates for Small Business

Washington, D.C. – At the start of National Small Business Week 2019, the Small Business & Entrepreneurship Council (SBE Council) released its 23rd annual look at how public policies in the 50 states affect entrepreneurship, small businesses and the economy.

Small Business Policy Index 2019: Ranking the States on Policy Measures and Costs Impacting Entrepreneurship and Small Business Growth” ranks the 50 states according to 62 different policy measures, including assorted tax, regulatory and government spending measures.

Raymond J. Keating, SBE Council’s chief economist and author of the study, noted:

“Most small business owners have firsthand knowledge of the costs and burdens imposed by government. Taxes and regulations, for example, drain enterprises of vital resources, distort decision-making and incentives, and redirect resources and energies away from starting up, maintaining, improving and/or expanding a business. Unfortunately, too many elected officials, policy advisers, and special-interests ignore the economic realities of how government affects entrepreneurship, business and investment. The ‘Small Business Policy Index’ provides a much-needed reminder, making clear which states’ lawmakers actually have been making positive decisions for entrepreneurship, small businesses, investment, and economic, income and employment growth.”

In terms of their policy environments, the most entrepreneur-friendly states under the “Small Business Policy Index 2019” are: 1) Texas, 2) Nevada, 3) Florida, 4) South Dakota, 5) Wyoming, 6) Indiana, 7) Utah, 8) Alabama, 9) Arizona, 10) Washington, 11) Tennessee, 12) Colorado, 13) Ohio, 14) Michigan, and 15) North Carolina.

In contrast, the most unfriendly policy environments are: 50) New Jersey, 49) California, 48) Hawaii, 47) New York, 46) Minnesota, 45) Vermont, 44) Connecticut, 43) Oregon, 42) Iowa, 41) Maine, and 40) Maryland.

As part of this report, the 50 states also are ranked based exclusively on 26 tax or tax-related measures in the “Small Business Tax Index 2019.”

In terms of their tax environments, the most entrepreneur-friendly states under the “Small Business Tax Index 2019” are: 1) Texas, 2) South Dakota, 3) Nevada, 4) Wyoming, 5) Florida, 6) Washington, 7) Ohio, 8) Colorado, 9) Alaska, 10) Alabama, 11) Arizona, 12) North Carolina, 13) Michigan, 14) Indiana, and 15) Tennessee.

The 10 worst state tax systems for small businesses are: 50) New Jersey, 49) California, 48) Hawaii, 47) Minnesota, 46) Iowa, 45) Vermont, 44) New York, 43) Oregon, 42) Maine, 41) Connecticut, and 40) Nebraska.

The “Small Business Policy Index 2019” can be read or downloaded here, and an interactive map that includes highlights can be accessed here.

The report explains why each measure is included, such as the effects on small business and the economy, along with an extensive section reviewing various studies relevant to the items included in the Index.

Keating noted, “It cannot be ignored that economic growth and population growth are significantly faster in the top half of the states ranked on the Index compared to the bottom half. In addition, public policy impacts opportunity and quality of life for all, as exhibited by movement of people among the states, with the states ranking in the bottom half on the Index losing significant population to the states ranked in the top half.”

The report highlights differences in terms of real economic growth, population growth, and net domestic migration (or the movement of people between the states, that is, excluding births, deaths and international migration).

SBE Council President and CEO Karen Kerrigan said: “Many Governors are advancing innovative and bold reforms to attract investment and entrepreneurs, while others continue down the self-destructive path of ever-increasing government burdens. The latter group ends up repelling business opportunity and encouraging their current entrepreneurs to search elsewhere for low-cost, business-friendly environments. States cannot get complacent, though some are, as businesses are continuously seeking to cut costs to stay competitive. States that provide better business environments and continuously improve their policy climates are in the best position to attract new investment, entrepreneurs, and business relocation opportunities. People are also moving to these low-cost, business-friendly states, which provides for a ready workforce.”

Small Business Policy Index 2019

Rank State SBPI
1 Texas 45.798
2 Nevada 49.100
3 Florida 49.920
4 South Dakota 51.618
5 Wyoming 56.093
6 Indiana 68.129
7 Utah 71.002
8 Alabama 71.378
9 Arizona 71.449
10 Washington 71.527
11 Tennessee 72.570
12 Colorado 73.496
13 Ohio 73.543
14 Michigan 73.728
15 North Carolina 74.517
16 Virginia 75.880
17 Mississippi 78.522
18 North Dakota 79.159
19 Missouri 79.938
20 South Carolina 79.998
21 Oklahoma 80.653
22 Georgia 80.689
23 Alaska 82.870
24 New Mexico 84.238
25 Kansas 85.673
26 Idaho 85.720
27 New Hampshire 87.436
28 Wisconsin 87.675
29 Louisiana 89.047
30 Kentucky 89.051
31 West Virginia 89.325
32 Montana 90.785
33 Delaware 91.472
34 Pennsylvania 94.309
35 Illinois 96.716
36 Arkansas 98.069
37 Nebraska 102.046
38 Massachusetts 105.044
39 Rhode Island 106.290
40 Maryland 107.927
41 Maine 109.022
42 Iowa 112.303
43 Oregon 112.829
44 Connecticut 113.830
45 Vermont 119.403
46 Minnesota 122.883
47 New York 124.075
48 Hawaii 129.044
49 California 143.165
50 New Jersey 146.270

 

Small Business Tax Index 2019

Rank State SBTI
1 Texas 11.396
2 South Dakota 13.389
3 Nevada 13.447
4 Wyoming 14.752
5 Florida 19.404
6 Washington 19.633
7 Ohio 32.307
8 Colorado 32.680
9 Alaska 33.240
10 Alabama 33.570
11 Arizona 34.634
12 North Carolina 34.916
13 Michigan 35.906
14 Indiana 36.405
15 Tennessee 38.440
16 Utah 38.450
17 North Dakota 39.000
18 Missouri 40.528
19 Mississippi 41.330
20 South Carolina 41.495
21 Oklahoma 41.674
22 Virginia 41.754
23 New Mexico 42.523
24 Georgia 46.197
25 New Hampshire 46.328
26 Kentucky 47.822
27 West Virginia 48.236
28 Louisiana 48.555
29 Montana 49.239
30 Delaware 49.331
31 Kansas 50.031
32 Massachusetts 50.468
33 Pennsylvania 51.277
34 Idaho 52.112
35 Wisconsin 52.592
36 Rhode Island 53.779
37 Illinois 54.209
38 Arkansas 54.542
39 Maryland 58.803
40 Nebraska 59.613
41 Connecticut 63.698
42 Maine 66.055
43 Oregon 67.504
44 New York 67.653
45 Vermont 68.215
46 Iowa 76.245
47 Minnesota 77.643
48 Hawaii 78.451
49 California 85.674
50 New Jersey 93.923

 

from – SBECouncil.org – by Raymond J. Keating

 

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