Starting a business is a big decision and it's important to choose the right state for success. The South Dakota Office of Economic Development offers a free business creation package for those interested in starting a business in the state. With no corporate or individual income taxes, South Dakota is one of the most tax-friendly states for small businesses. Florida has seen an increase in new entrepreneurs over the past five years, with 0.42% of adults who are not business owners starting their own business each month.
Unfortunately, only 49.5% of those companies survive five years. Florida is ranked No. 1 for its low corporate tax rate and No. 2 for its low individual income tax rate, making it an attractive fiscal climate for entrepreneurs.
Texas has the highest rate of new entrepreneurs, with 410 Texans opening a new business on any given day. Even better, more than half of those new businesses, 50.9%, are expected to last five years. While Texas has no corporate or personal income taxes, the sales tax rate is 8.19%. Idaho's fiscal climate is not as favorable to entrepreneurs as elsewhere, with a corporate income tax rate and individual income tax rate peaking at 6.925%.
The combined state and local tax burden is 9.3%. Utah offers links to numerous new business resources for new entrepreneurs, but the rate of new entrepreneurs in Utah is lower than that of neighboring states, with a five-year survival rate of 49.8%. Utah's maximum corporate tax rate and individual income tax rate are both 4.95%, and combined state and local taxes average 7.18%. Arizona has seen an increase in COVID-19 cases, with 8,622 cases per 100,000 people and new cases increasing daily.
The fiscal climate in Arizona is not the most welcoming for these new companies, with a maximum corporate tax rate of 4.9% and a combined state and local tax burden of 8.8%. When considering which state is best for entrepreneurs to start a business, it's important to consider the fiscal climate as well as the entrepreneur's status as a factor in business success. States have been compared to determine which are best and worst for entrepreneurs who want to start and maintain a successful business.
