Tax havens

Want to keep more of your profits? Check out these 5 states from our Best Places to Launch list, where taxes are low -- and in some cases, nonexistent.

1 of 5
South Dakota
South Dakota
Tax breaks: No personal or corporate income tax
Best Places to Launch: Rapid City, Sioux Falls

For the first time, South Dakota edged past Wyoming to capture the top spot in the Tax Foundation's annual state-by-state ranking of business tax climates.

What makes the state such a tax haven? There's no personal or corporate income tax -- and South Dakota is one of a shrinking number of states that doesn't levy a "gross receipts" business tax on revenue. Anything you ring up in sales or profit, you get to keep.

South Dakota also has a comparatively modest sales tax. The statewide rate is 4%, though some municipalities tack on their own toll, taking the rate as high as 6%.

In Sioux Falls -- #5 on our list of the best small metro areas in which to launch a business -- low taxes are helping the city diversify its economy and drive business growth, says Amy Smolik of the Sioux Falls Chamber of Commerce.

Health care is the state's largest industry, and in its wake South Dakota is nurturing technology and biotech startups. Sioux Falls incubates them in its hometown South Dakota Technology Business Center. The favorable tax climate is a draw for penny-pinching startups.

"We also have a large work force that has a very strong work ethic," Smolik says. "We always tout that as a Midwest thing or a South Dakota thing, but we're known for having hard workers." -Jennifer Lawinski

NEXT: Texas

Email | Print | Share  |  RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all RSS FEEDS (close)
LAST UPDATE: Oct 20 2009 | 9:27 AM ET
Best launch spots: See all 50 Growing economies, great workers, stable housing markets -- these metro areas have what entrepreneurs need to thrive. More
Why I Launched HereWe asked entrepreneurs in all 50 Best Places how their hometown treats entrepreneurs. More
5 deadly spots Every restaurateur knows about Cursed Locations. Here's a look at 4 trying to break the streak -- and one that failed. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.