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South Dakota Tops for Business Taxes DC at the Bottom

Posted by: Mark Marich on April 23, 2012 Source: Policy Dialogue on Entrepreneurship

Once again, South Dakota has the best state tax system for entrepreneurship and small business. According to Business Tax Index 2012 from the the Small Business & Entrepreneurship Council, the Mount Rushmore state edged out Texas and Nevada after compiling data on 18 different tax measures.

Ranking the U.S. states (and the District of Columbia) on how friendly their tax systems are to entrepreneurs, investors and businesses, the index measures the following:

  • State’s top personal income tax rate
  • State’s top individual capital gains tax rate
  • State’s top corporate income tax rate
  • State’s top corporate capital gains tax rate
  • Any added income tax on S-Corporations
  • Whether or not the state imposes an alternative minimum tax on individuals
  • Whether or not the state imposes an alternative minimum tax on corporations
  • Whether or not the state’s personal income tax brackets are indexed for inflation
  • Property taxes
  • Consumption-based taxes (i.e., sales, gross receipts and excise taxes)
  • Whether or not the state imposes a death tax
  • Unemployment taxes
  • Whether or not the state has a tax limitation mechanism
  • Whether or not the state imposes an Internet access tax
  • “Amazon” taxes
  • Gas tax
  • Diesel tax
  • Wireless taxes

Rounding out the top 10 were: Wyoming; Washington; Florida; Alaska; Alabama; Ohio and Colorado.

Which fared the worst? The District of Columbia owned the dubious distinction, well below even the poorest scoring states: Minnesota (50th); New Jersey (49th); New York (48th); Iowa (47th); and Maine (46th).

Category:  Tax Code  Tags:  SBE, South Dakota,

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