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Taxes
Top personal income tax rate:0%
Top corporate income tax rate:0%
Energy costs
Electricity:6.35 cents/kilowatthour
Gas (avg. price/gallon):$2.22
Labor
Minimum wage:$5.15/hour*
State has no minimum wage. This is the federal minimum wage.
1. South Dakota
Index score: 26.36

South Dakota stands out for its lack of taxes. It has no personal income, corporate income, capital gains or estate taxes. (Election Day may change the landscape a bit: On the ballot are proposals to eliminate the state's cellphone tax and increase cigarette taxes.) Health regulations are relatively light, and crime rates are second-lowest in the country (lowest is neighbor North Dakota). It's a beautiful state, with lots of land, a low cost of living, good economic growth, and little unemployment, says Karen Kerrigan, CEO and president of the Small Business & Entrepreneurship Council, a nonprofit group in Washington, D.C., that advocates for reduced government taxes and regulations on small business. Small business owners "tend to do well there," Kerrigan says. Unfortunately, the state's cold climate may give entrepreneurs thinking about moving there the shivers.
* SBE Council, a Washington, D.C.-based nonprofit which advocates for reduced government taxes and regulations on small business, tends to lobby for the Republican agenda when it comes to taxes and regulations.
In exclusive rankings for FSB.com from the Small Business & Entrepreneurship Council*, we looked for places low on taxes and light on government regulations. These places aren't. (more)
Which places are low on taxes? Exclusive rankings for FSB.com from the Small Business & Entrepreneurship Council.* (more)