What States are Tax Friendly to Small Businesses?

The Tax Foundation releases an annual study on the State Business Tax Climate Index and Ranking that looks at how tax friendly a state is to small businesses. They have developed a ranking that is a comparative measure that can provide insights on how the state tax system is “hampering the efforts of local entrepreneurs or the possible entry of new businesses.”

The study defines the best states as those who raise sufficient revenue without imposing at least one of the three major state taxes—sales taxes, personal income taxes and corporate income taxes.

According to the Index, the top 10 states with the best state business tax climate for 2007 are as follows:

1. Wyoming
2. South Dakota
3. Alaska
4. Nevada
5. Florida
6. Texas
7. New Hampshire
8. Montana
9. Delaware
10. Oregon

You can read about the 2007 ranking at the Tax Foundation