South Dakota is top tax-friendly states for SMBs

4/26/2011

With tax season drawing to a close, many entrepreneurs witnessed firsthand how large of an impact taxes can have on their businesses. If companies are looking to expand their footprint across the nation, they may want to consider setting up shop in South Dakota, as the state is the most tax-friendly according to a report from the Small Business & Entrepreneurship Council.

South Dakota scored 11.132 on the SBEC's list, putting it in the No. 1 position. Meanwhile, Texas, Nevada, Wyoming and Washington State were also highly ranked, filling out the top five. The worst regions in terms of small business tax friendliness include Iowa, New York, New Jersey, Minnesota and the District of Columbia.

"Each tax hits business directly or indirectly, distorts the workings of the marketplace and diminishes economic efficiency by shifting resources from the private sector (guided by prices, profits and losses) into government (guided by politics and special interest pressures)," notes the source. "But different taxes affect economic decision-making in different ways and impact the economy to differing degrees."

Businesses that are having trouble organizing their taxes may want to consider hiring an account. Commercial loans may help fund these outsourcing measures.