What States Are The Best And Worst For Small Business Owners?

What states are the best to start your own business?

It depends on who you ask, but there seems to be some consensus that Texas, Utah and Virginia are pretty good. California, however, is not exactly fostering the entrepreneurship spirit.

A 2014 survey by Thumbtack resulted in an A+ rating for Virginia. States were judged based on categories such as ease of hiring, regulations, and training and networking programs.

“Virginia earned a top-five rating for the friendliness of its health and safety, labor, and licensing regulations,” the survey states.

California, Rhode Island and Illinois were the lowest ranked states – each received an F. Connecticut and New Jersey received D grades.

California earned “a grade of F for its labor, health and safety, and environmental regulations, and a D for its tax code, licensing, and zoning laws,” the survey stated.

Another report ranked states in terms of tax friendliness.

Virginia and Texas finished strong again, ranking 19th and 3rd in the country. California was ranked 50th by the Small Business and Entrepreneurship Council report. The council looked at 23 different tax measures and combined them into one score.

“Capital and labor are more mobile than ever before in history. And entrepreneurs, workers, and investment will migrate to where they are treated best. Key among the factors considered are taxes, and that is the case country to country, and within the U.S., state by state,” stated Raymond J. Keating, Chief Economist for the SBE Council.

For details from the Thumbtack survey about your state click here.

A complete listing of the SBE state rankings can be found here and the SBE also has an interactive map of the country.

Here’s how Patch states ranked in the SBE Council’s Small Business Tax Index report:

Northeast

New York, Maryland, Connecticut, New Jersey and Rhode Island were ranked among the 15 worst states in the country, according to the Small Business Tax Index. Pennsylvania, New Hampshire and Massachusetts finished in the middle, ranked 29th, 30th and 32nd respectively.

South

Florida is among the most tax friendly states in the country, finishing sixth overall. Virginia, South Carolina and Georgia finished in the middle ranking 19th, 20th and 26th respectively.

Midwest

Ohio and Michigan were among the best states, finishing 9th and 13th overall while Iowa and Minnesota were among the worst ranking 46th and 48th. Illinois and Missouri were relatively tax friendly for small businesses ranking 25th and 22nd, while Wisconsin finished 35th.

West Coast

California was the worst state in the country for small business owners in terms of tax policy. Washington state, however, ranked 5th in the country, the highest ranking among Patch states.