Are Taxes and Regulations Making Your State Small-Business UNfriendly?

By Anita Campbell - How small-business friendly is your state?

The Small Business Survival Index is published each year by the Small Business and Entrepreneurship Council. It ranks the 50 U.S. states plus the District of Columbia according to the burden that government places on them.

This year, the most small-business friendly state acording to the Index is South Dakota. Nevada is next.

And which states are the most UNfriendly in terms of government burden on small businesses? New Jersey and the District of Columbia.

Here are the rankings:

Click for larger chart

The Index measures 31 different government costs that affect small businesses and entrepreneurs. The 31 costs include tax rates, capital gains rates, crime rates, and a variety of other factors.

Some people (usually those in favor of raising taxes) criticize the Index. But I find it a useful wake-up call for what all those regulations and taxes and reporting measures do to our businesses. Everything you require a business to do adds cost in some way -- let's never forget it.

For more, download the 2007 Small Business Survival Index report (PDF).