Running a small business can be extremely difficult in the best of times and downright impossible in the worst. So, in the event that your hard work and toil actually result in a profitable business, it can be especially galling when the tax man comes calling, asking for you to fork over the previous profits that you worked so hard to acquire.
However, depending on where you operate, that small-business tax burden can vary quite a bit. And although there are usually a lot of factors other than just the state tax burden dictating where you would open a business, it can still be an important factor that might ultimately be the difference between success and failure.
Fortunately, the Tax Foundation — a think tank focused on issues surrounding taxation — created a definitive ranking of every state based on its business tax structure with the 2019 State Business Tax Climate Index. That ranking, though, digs deeper into tax policy to provide a broader judgment of how each state is collecting its taxes. As such, simply having lower rates won’t necessarily result in a better ranking if it’s part of an otherwise flawed tax code. Take a closer look at how each state in the country is taxing businesses and how that affects the quality of the business environment there.
How the 50 States Tax Small Businesses