Does your state love small biz?
In what state is your company located and how has that helped or hurt your business? The SBE council has ranked the states from friendliest to least friendly (read highlights) for entrepreneurs. FSB wants to hear your take on the listing.
From Joey, Ketchikan, Alaska How about the State of Alaska? Please assess which city and what numbers do these places connect to your survey.
From James Page, Bottineau ND North Dakota just fell off the economic development map with a ruling from the ND Supreme Court that allowed piercing the corporate veil simply because a company was "undercapitalized"…..they don't define it, but basically have stripped any corporate protection from virtually every start-up company in the state….it's a disaster for ND.
From Sharon Phillips While I find entry costs interesting trivia in small business. What I'm most interested in is where small business is growing and why. I want to know about natural disasters and resource shortages, like water. Where is small business collapsing? For example the housing boom may have made Ohio look very desirable a few years ago.
From Phil Kammann This article was interesting but I would love to see a more comprehensive analysis. I think my state, IL, would rank much higher in the worst category if a more well-rounded analysis was done. Our minimum wage just went up $1 which really affects a lot of small businesses. And the Gov pushed forth several very harsh anti-business programs, only a few of which got enacted thankfully. One he pushed for was the gross receipts tax- a tax all transactions (even every step of the product's cycle from mfg. to distribution). We also just went smoke free, which will harm many bars and restaurants but especially the casinos and bars on the borders of smoke-free states.
From emilymaltby Dennis – you may find your answers in this press release:
http://www.sbecouncil.org/news/display.cfm?ID=2424
Hope this helps!
From dennis mchugh What's the full rankings, I only see the first 10 & last 10. Where are the rest?
From James R. Camp South Dakota is a wonderful place for sociopaths and drug operations. Law enforcement and court systems are corrupt and human life is cheap. The main business that is protected here is the manufacturing and distribution of Methamphetamines. I live here and have watched the law enforcement people acting as escorts for the drug makers and protecting them even from murder charges. There is an obvious bias toward the promotion and protection of illegal drug activity by law enforcement and the court system. The reputation left by the outlaws and prostitutes that settled here still remains. My wife and I are moving from this uncultured and ignorant area to one that has a functioning and fair legal system. Taxes are not the only thing to look at in judging the climate for business. The business attitude of this area is that of a kingdom, where the rule of monopolies is favored over "free enterprise". Please include other factors in your assessment of business climates. I would hate to see innocent people coming into this corrupt environment.
From Dave Storm Great list, but……….
who are the "top 10" of the top 10 in lowest sales taxes on food,clothing, and gasoline,(and other utilities).etc.etc.
From Don Dogan, ABR, GRI I just finished reading about the “Ten Worst States for Starting a Business” and was wondering where you got your information about property taxes.
You say that California’s property tax rate is 2.55%. If you mean 2.55% of the value of the property, maybe you haven’t heard about Proposition 13 passed in 1978. It sets the assessment of real estate at the purchase price and limits the tax rate to 1%. Increases are limited to 2% per year.
The result is most large corporations with large real estate holdings don’t move. Their taxes are a fraction of what it would cost to sell and then rebuy the property.
Thanks for an interesting article.
From Don Leeper These rankings are bull. I am an entrepreneur who has lived in California and I currently have a business in Minnesota, two of the supposedly anti-business states. The reality is that places like Minnesota and California are great places to start businesses, because they have historically spent tax dollars to provide infrastructure and education. Minnesota is the home of large numbers of medical technology and other high-tech businesses, as well as giants like 3M, General Mills, Target and Best Buy–and hundreds of startups.
From Karsten Barde, Somerville, MA Dear editor,
I just read the second-annual "10 best and worst states for starting a business" feature online. From my perspective, while an improvement over last year's article featuring the same news hook, the FSB piece still draws too heavily on the narrowly predictable anti-tax, anti-regulation, anti-labor point of view of the Small Business & Entrepreneurship Council.
You were right in pointing out the overlap between SBEC and the Republican agenda in the original article from 2006, and in addressing some of the obvious omissions (venture capital, educated labor pool) from SBEC's list in the 2007 version. The overlay of SBEC's rankings with overall population growth is also a valuable addition in 2007. Still, is there not available data on per-capita rates of new business started per year, which would be even more relevant to compare?
I suspect that even deeper analysis would paint a more complex picture — one that might take into account the correlation between a healthy entrepreneurship sector and public investment, for example… infrastructure, technology development, education, research, quality of life.
Next year I'd love to see FSB take a step further by providing more independent research and reporting on this topic. I'd also recommend avoiding the jaunty, tongue-in-cheek tone (e.g. "attention libertarians, find out where the cold dead hand of the state weighs heaviest") — that only amplifies the amateurish effect of SBEC's one-dimensional research.
In addition, I recommend immediately revising the Washington DC snapshot in this year's online feature. The capitol city's poverty is a national embarassment, and to refer to the crime as "generally restricted to the Southeast quadrant" is a bit like saying casualties in America's war in Iraq are mostly limited to Iraqis: technically true, but callously reported.
Thank you for your time.
Respectfully,
Mr. Karsten Barde
From R. Luke How can you rate Washington State #4. Did you forget that Washington has one of the most regressive Business and Occupational taxes in the entire nation?
From Vic, Las Vegas I would put Nevada first because SD and WY don't have the air, road or rail shipping that NV has. Also, NV has no state income tax. None, you simply don't have to do that paperwork.
From Jerry, Monrovia, CA The "worst" ten states have a per-capita GDP that is 135% larger than the per-capita GDP of then "best" ten states. So, if you prefer a state that can only manage 74% of the economic output of states that are supposedly "anti small business," then one of these anti-regulation, anti-tax states is the one for you.
From Dave , Iriwn , PA Can anything be worse then PA for a small business, LLC, that files as a partner ship for federal tax pruproses? PA will still tax the business as a corporation.The pass through of earngings, as an LLC choosing partnership filing status for federal taxes, to owners at their personal rates is not an option in PA. Add to this the capital stock and francise tax which is added to LLCs and I would think you have one of the worst small business environments in the US.
From Sam Mesa AZ One factor missed is how strong is the local economcy, ie. retail, business to business, easy access to global markets. The state could have the best "conditions" but if nobody is buying all that does not matter,
From James Faliveno, cherry Valley, NY I agree with the rankings. New York State is hell on small businesses!
From Fall City, WA WRONG! Washington State is NOT friendly to small businesses. No way. Not now. Never! It has among the highest gas taxes, affecting shipping of materials and finished products, and is almost prohibitively costly and extremely permit-burdened to obtain building permits. U goofed!
From Lance Rund, San Jose, CA I certainly agree about California. The corporate income tax and the crushing personal income tax are only made worse by local fees. San Jose is among the most hostile cities to in-home businesses in the country, with business licenses required for everything, right down to someone baking cookies in a home oven for catering… and that license is several hundred dollars.
With the state setting the tone for business-hostility, it's no surprise that local governments jump on the bandwagon. Even if you CAN fight City Hall, can you afford to fight Sacramento too? Easier to fight neither… and don't think that the people creating these policies aren't aware of that dynamic. They count on it.
While it is true that high-dollar entrepreneurship is alive and well in Silicon Valley, calling a company that starts out with several million in venture capital a "small business" is more than a bit of a stretch. Pointing to those businesses while crushing mom-and-pop with high financial burdens is hypocritical at best.
The Franchise Tax Board contributes its own draconian hand. Even the IRS, if you are trying to manage a tax debt, will tell you "Pay off the State first. We'll cut you some slack; they'll seize your business and home." You know you're in California when the IRS feels sorry for you.
No wonder California businesses are fleeing to Nevada. If ever I set out on my own, it won't be here.
(Note: One factor that really is a non-issue is the minimum wage. Yes, it's higher than the rest of the country, and even higher than listed in some localities such as San Francisco. However, you can't find people who will work even at the elevated minimum wage; the high cost of living makes that a non-starter. With the low unemployment rate, the wage situation is currently in favor of the employee, which is actually an encouraging state of affairs. If you have to pay $15 an hour to convince someone to do a job, what difference does it make if the minimum wage is $7.50?)
From Riley, Oak Hill, VA The article ignored several key attributes of startups, such as 1) sources of funding that understand your industry (i.e., people that made their money in developing land rarely understand biotech or software development), 2) academic research in our industry because they generate undergraduate and graduate students that can become future hires, and 3) large corporations for strategic partnering to help defend against large, unfriendly competitors. My friends in Silicon Valley had all of these attributes going for their company. However, I can nurture a close relationship with Federal R&D agencies to get my funding (since I used to work with some of them) and not dilute my equity.
Riley (Please withhold my last name)
From Robert Haight, Grand Rapids, Michigan We will not be in sixth place next year. We have a mess to deal with. Our legislature is divided about taxation. We have the country's highest unemployment, but my area, Grand Rapids, is not as bad as in the Detroit area. I am sorry to say that we will be in the lower half next year. I hope that I will be wrong.
The ratings are interesting, and help show where we should be.
From Steve Lavinder, Kapolei, HI Only taxes and utilities are taken into consideration.
A couple items to consider are median cost of buildings or offices per square foot, and average cost of permits for business and construction. Take a look at these and I'm sure Hawaii will move up on that list. Case in point, the environmental review of the Hawaii Superferry.
From Ken, Hilo, Hawaii The article mentioned high unemployment. However, our local media tell us we have one of the lowest unemployment rates in the nation. This isn't to say we have the most motivated work force, but tourism is still strong, people are still building, and there is no shortage of work and disposable income. I think with the right marketing approach and attention to customer service the sky is still the limit for small business owners.
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I see it as agendia was and is to expord domestic corp out of the usa to setup shop there, then to let citizens left behind, for us to make up paying more taxes to make up on corp. business taxes loss from outsourcing big business. There putting more on Small Business to make up for the corp tax loses, thats why the states are adding, increasing cost to small business that are left in the USA.