Amid the calls for job creation incentives, access to capital, increased federal procurement opportunities and other measures to help small businesses “get back into the game,” the Small Business & Entrepreneurship Council (SBE Council) has published its annual 2010 Business Tax Index.
The Business Tax Index 2010: Best to Worst State Tax Systems for Entrepreneurship and Small Business ranks the 50 states and the District of Columbia according to the costs of their tax systems for entrepreneurship and small business.
The Business Tax Index 2010 draws on and combines 16 different tax measures into one tax score for each state and the District of Columbia. Taxes considered are income, capital gains, property, death/inheritance, unemployment, and various consumption-based taxes, including state gas and diesel levies.
So, where do Kansas and Missouri fall on the Index? Missouri comes within spitting distance of the 10 best state tax systems at number 16; Kansas, on the other hand, at number 32, is within a stone’s throw of landing near the bottom of the list.
The 10 best state tax systems are: 1) South Dakota, 2) Texas, 3) Nevada, 4) Wyoming, 5) Washington, 6) Florida, 7) Alabama, 8)Alaska, 9) Ohio, and 10) Colorado.
The 10 worst state tax systems are: 42) Massachusetts, 43) Oregon, 44) Vermont, 45) Iowa, 46) Maine, 47) New York, 48) California, 49) Minnesota, 50) New Jersey, and 51) District of Columbia.
Unfortunately, many states have had to raise taxes or create new ones just to stay in business themselves. The situation is a Catch 22 in many respects. On the one hand, more and higher taxes are just another grenade that’s being lobbed at still shell-shocked businesses fighting to survive in this economy. Businesses would argue that if they could be left alone to recover and put people to work, governments would see their tax rolls increase. Further, low taxes can be an incentive for businesses to relocate to states with more competitive rates, again increasing the tax base. On the other hand, like the businesses themselves, local and state entities need money now, in many cases, and can’t wait for the business community to recover.
For the full report, visit http://www.sbecouncil.org/businesstaxindex2010/