ThomasNet News reports that states vary in their degree of “friendliness” to entrepreneurs, with some offering more favorable conditions than others. Some of the key criteria in determining the small business and startup climate in a particular state are capital gains and corporate income taxes; property, sales, gross receipts and excise taxes; local operational costs; regional compensation rates; and health care and regulatory expenses.
Based on these factors, the Small Business & Entrepreneurship Council provides rankings of each state’s favorability for entrepreneurs in a late-2009 report.
According to the findings, the following are the top 10 most favorable states for entrepreneurs, in descending order: South Dakota, Nevada, Texas, Wyoming, Washington, Florida, South Carolina, Colorado, Alabama and Virginia.
These states are characterized by relatively low taxation levels and fewer regulatory measures that add expenses onto business activities or slow down investment. Compensation rates, cost of living and health care expenses are also favorable to small business owners in these regions.
The least-favorable areas for entrepreneurs, according to the report: the District of Columbia, New Jersey, California, New York, Vermont, Maine, Rhode Island, Massachusetts, Minnesota and Hawaii.
Photo by south-dakota-map.org.