Florida Is Among 15 Best States Based on Tax Systems for Entrepreneurship and Small Business

Florida is ranked 6th in the 2012 listing of the 15 best states based on tax systems for entrepreneurship and small business by the nonprofit organization Small Business and Entrepreneurship Council (SBE Council). Florida has a business tax index of 23.339, the sixth lowest index. The highest index is 63.007, which is that of Washington, D.C., and the lowest
index is that of South Dakota, which is 11.813.

The best states were listed by the SBE Council using the following factors:

  • Personal income tax
  • corporate income tax
  • Individual capital gains tax
  • Corporate capital gains tax
  • S-Corporation income tax
  • Alternative minimum taxes on individuals and corporations
  • Property taxes
  • Consumer taxes
  • Unemployment tax
  • Amazon tax
  • Gas or diesel tax
  • Wireless taxes
  • Internet access tax
  • Death tax
  • Indexing of personal income tax for inflation

Based on personal income tax, Florida is on top of the ranking together with 8 other states that do not collect state personal income taxes. The other states are Alaska, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. The highest state personal income tax rate is that of Hawaii, which is 11 percent.

Florida also does not collect individual capital gains taxes. The 8 other states mentioned above are also capital-gains-tax-free for individuals. The highest individual capital gains tax rate is that of California, which is 10.3 percent.

Florida collects corporate income taxes, but it imposes among the lowest rates. At 5.5 percent, Florida has the 9th lowest rate among states collecting state taxes. There are only 6 states which are corporate-income-tax free, namely Nevada, Ohio, South Dakota, Texas, Washington and Wyoming. The 5 highest corporate income tax rates are those of Pennsylvania, 9.99 percent; Washington, D.C., 9.975 percent; Iowa, 9.9 percent; Minnesota, 9.8 percent; and Illinois, 9.5 percent.

The corporate capital gains tax rate in Florida is also among the lowest in the U.S. At 5.5 percent, it is the 11th lowest among states collecting corporate capital gains taxes.  Six states are not collecting this type of tax, and the lowest rate is that of Hawaii, which is 4 percent. The 5 highest corporate capital gains tax rates are again those of Pennsylvania, Washington, D.C., Iowa, Minnesota and Illinois.

Start your business in Florida. It’s one of the best states in the U.S., not only based on tax savings, but also based on weather, lifestyle and cost of living.