If you’re an entrepreneur looking to relocate you may want to consider South Dakota, which was ranked no. 1 in the Small Business and Entrepreneurship Council’s Business Tax Index 2012.
The annual tax index grades the states on 18 different tax measures and combines those results into one single tax score. The ranked taxes include: income, property, death/inheritance, capital gains, unemployment, and other consumption based taxes like state gas.
According to the index, the top 5 state tax systems for entrepreneurs in the U.S. are South Dakota, Texas, Nevada, Wyoming and Washington. While the worst of the list are District of Columbia, Minnesota, New Jersey, New York and Iowa.
“All taxes matter, whether imposed at the federal, state or local level of government. They matter to consumers, entrepreneurs, investors and businesses. State and local levies matter in terms of a state's competitiveness,” said Raymond J. Keating, author of the index report and chief economist for the SBE Council said. “And they matter when it comes to economic growth and job creation.”
Keating added, “While ‘Tax Day' 2012 [was] officially April 17, it is critical to understand that federal, state and local taxes are a burden on entrepreneurs, investors and the economy throughout the year."