The 15 Worst States In America For Starting A Business

david paterson

The supposed engine of the economic recovery — small business — is in bad shape.

Even though banks are borrowing from the government for next-to-nothing, small companies are having trouble finding credit. And even if banks heed Washington’s call to lend more, plenty of state and local regulations can crush entrepreneurial dreams.

So pick your base wisely. A good start to the best and worst places is the “Small Business Survival Index” released this month by the Small Business and Entrepreneurship Council. The index ranks all 50 states based on public policy factors, including 36 major government-imposed or government-related costs like taxes, regulatory costs, government spending, property rights, health care and energy costs.

“Policy matters. Most politicians talk a good game when it comes to small business, but
their actions don’t often match their rhetoric,” said SBE Council chief economist Raymond J. Keating in a release. “These measures should matter to everyone because small businesses, of course, drive innovation, economic growth and job creation.”
 
South Dakota, Nevada and Texas, Wyoming and Washington top the ranking for most entrepreneur-friendly. But be sure to avoid the worst — we round up the 15 states small businesses should avoid.

See the Worst States for Small Business >
Note: Images are of respective state governors; “t” means “tie” in ranking.

[slideshow]
[slide
permalink=”15-west-virginia-1″
title=”#15 West Virginia”
content=”Small Business Survival Index: 63.689 (#36)

Personal Income Tax Rates: 6.500 (#32t)

Corporate Income Tax Rates: 8.500 (#38t)

Property Taxes: 2.14 (#8)

Workers’ Compensation Benefits Per $100 of Covered Wages: 3.08 (#51)”
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[slide
permalink=”14-maryland-2″
title=”#14 Maryland”
content=”Small Business Survival Index: 64.342 (#37)

Personal Income Tax Rates: 6.250 (#30)

Corporate Income Tax Rates: 8.250 (#34t)

Property Taxes: 2.51 (#13)

Workers’ Compensation Benefits Per $100 of Covered Wages: 0.74 (#11t)”
image=”http://static.businessinsider.com/image/4b229a7c000000000039821f/image.jpg”
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[slide
permalink=”13-oregon-3″
title=”#13 Oregon”
content=”Small Business Survival Index: 65.179 (#38)

Personal Income Tax Rates: 11.000 (#50t)

Corporate Income Tax Rates: 7.900 (#32t)

Property Taxes: 3.01 (#26)

Workers’ Compensation Benefits Per $100 of Covered Wages: 0.88 (#25)”
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[slide
permalink=”12-north-carolina-4″
title=”#12 North Carolina”
content=”Small Business Survival Index: 65.497 (#39)

Personal Income Tax Rates: 7.983 (#43)

Corporate Income Tax Rates: 7.107 (#27)

Property Taxes: 2.40 (#12)

Workers’ Compensation Benefits Per $100 of Covered Wages: 0.89 (#26t)”
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[slide
permalink=”11-connecticut-5″
title=”#11 Connecticut”
content=”Small Business Survival Index: 66.627 (#40)

Personal Income Tax Rates: 6.500 (#32t)

Corporate Income Tax Rates: 8.250 (#34t)

Property Taxes: 4.20 (#43t)

Workers’ Compensation Benefits Per $100 of Covered Wages: 0.75 (#13)”
image=”http://static.businessinsider.com/image/4b229cf80000000000256419/image.jpg”
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[slide
permalink=”10-iowa-6″
title=”#10 Iowa”
content=”Small Business Survival Index: 67.485 (#41)

Personal Income Tax Rates: 5.837 (#25)

Corporate Income Tax Rates: 9.900 (#49)

Property Taxes: 3.47 (#33)

Workers’ Compensation Benefits Per $100 of Covered Wages: 0.98 (#31)”
image=”http://static.businessinsider.com/image/4b229dc5000000000033449d/image.jpg”
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[slide
permalink=”9-hawaii-7″
title=”#9 Hawaii”
content=”Small Business Survival Index: 68.454 (#42)

Personal Income Tax Rates: 11.000 (#50t)

Corporate Income Tax Rates: 6.400 (#20)

Property Taxes: 2.27 (#10)

Workers’ Compensation Benefits Per $100 of Covered Wages: 1.09 (#38)”
image=”http://static.businessinsider.com/image/4b22afe4000000000049f18a/image.jpg”
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[slide
permalink=”8-minnesota-8″
title=”#8 Minnesota”
content=”Small Business Survival Index: 72.149 (#43)

Personal Income Tax Rates: 7.850 (#42)

Corporate Income Tax Rates: 9.800 (#48)

Property Taxes: 2.87 (#21)

Workers’ Compensation Benefits Per $100 of Covered Wages: 0.80 (#15t)”
image=”http://static.businessinsider.com/image/4b22affd0000000000edb0c4/image.jpg”
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[slide
permalink=”7-massachusetts-9″
title=”#7 Massachusetts”
content=”Small Business Survival Index: 72.515 (#44)

Personal Income Tax Rates: 5.300 (#22)

Corporate Income Tax Rates: 9.500 (#47)

Property Taxes: 3.48 (#34t)

Workers’ Compensation Benefits Per $100 of Covered Wages: 0.51 (#3)”
image=”http://static.businessinsider.com/image/4b22b00a0000000000845b0d/image.jpg”
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[slide
permalink=”6-rhode-island-10″
title=”#6 Rhode Island”
content=”Small Business Survival Index: 73.339 (#45)

Personal Income Tax Rates: 6.500 (#32t)

Corporate Income Tax Rates: 9.000 (#44)

Property Taxes: 4.68 (#47)

Workers’ Compensation Benefits Per $100 of Covered Wages: 0.80 (#15t)”
image=”http://static.businessinsider.com/image/4b22b01c00000000001d545e/image.jpg”
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[slide
permalink=”5-maine-11″
title=”#5 Maine”
content=”Small Business Survival Index: 74.699 (#46)

Personal Income Tax Rates: 8.500 (#44t)

Corporate Income Tax Rates: 8.930 (#43)

Property Taxes: 4.60 (#46)

Workers’ Compensation Benefits Per $100 of Covered Wages: 1.34 (#47)”
image=”http://static.businessinsider.com/image/4b22b04000000000003a00d4/image.jpg”
caption=””
credit=””
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]
[slide
permalink=”4-vermont-12″
title=”#4 Vermont”
content=”Small Business Survival Index: 75.717 (#47)

Personal Income Tax Rates: 9.400 (#47)

Corporate Income Tax Rates: 8.500 (#38t)

Property Taxes: 5.29 (#50)

Workers’ Compensation Benefits Per $100 of Covered Wages: 1.10 (#39)”
image=”http://static.businessinsider.com/image/4a8c6b205c9a9a334b6b9c55/image.jpg”
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[slide
permalink=”3-new-york-13″
title=”#3 New York”
content=”Small Business Survival Index: 76.940 (#48)

Personal Income Tax Rates: 9.400 (#47)

Corporate Income Tax Rates: 8.307 (#36)

Property Taxes: 4.23 (#45)

Workers’ Compensation Benefits Per $100 of Covered Wages: 0.64 (7t)”
image=”http://static.businessinsider.com/image/4b22b0f70000000000c3438b/image.jpg”
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[slide
permalink=”2-california-14″
title=”#2 California”
content=”Small Business Survival Index: 77.749 (#49)

Personal Income Tax Rates: 10.550 (#48)

Corporate Income Tax Rates: 8.840 (#42)

Property Taxes: 2.74 (#16)

Workers’ Compensation Benefits Per $100 of Covered Wages: 1.28 (#45)”
image=”http://static.businessinsider.com/image/f17a6c793f2d664aba8d7100/image.jpg”
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[slide
permalink=”1-new-jersey-15″
title=”#1 New Jersey”
content=”Small Business Survival Index: 84.730 (#50)

Personal Income Tax Rates: 10.750 (#49)

Corporate Income Tax Rates: 9.360 (#45)

Property Taxes: 5.02 (#49)

Workers’ Compensation Benefits Per $100 of Covered Wages: 0.94 (#30)”
image=”http://static.businessinsider.com/image/4b22927a0000000000a08c09/image.jpg”
caption=””
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[slide
permalink=”bonus-dist-of-columbia-16″
title=”Bonus: Dist. of Columbia”
content=”Small Business Survival Index: 84.795 (#51)

Personal Income Tax Rates: 8.500 (#44t)

Corporate Income Tax Rates: 9.975 (#50)

Property Taxes: 4.13 (#41)

Workers’ Compensation Benefits Per $100 of Covered Wages: 0.26 (#1)

Note: According to the report, the District of Columbia was not included in the studies on the states’ liability systems, eminent domain legislation and highway cost efficiency, so ‘D.C.’s last place score actually should be even worse.’
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[slide
permalink=”see-also-17″
title=”See also”
content=”The 25 Laziest Cities In America
image=”http://static.businessinsider.com/image/4af44653000000000070711d/image.jpg”
caption=””
credit=””
credit_href=””
]
[/slideshow]

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