SBE Council's "Business Tax Index 2012" pulls together 18 different tax measures, and combines those into one tax score that allows the 50 states and District of Columbia to be compared.
Among the taxes included are income, capital gains, property, death/inheritance, unemployment, and various consumption-based taxes, including state gas and diesel levies.
According to the "Business Tax Index 2012," the 15 best tax systems are: 1) South Dakota, 2) Texas, 3) Nevada, 4) Wyoming, 5) Washington, 6) Florida, 7) Alaska, 8)Alabama, 9) Ohio, 10) Colorado, 11) Mississippi, 12) Michigan, 13) South Carolina, 14) Tennessee, and 15) Missouri.
The 15 worst state tax systems are: 37) Nebraska, 38) North Carolina, 39) Illinois, 40) Oregon, 41) Rhode Island, 42) Connecticut, 43) Hawaii, 44) Vermont, 45) California, 46) Maine, 47) Iowa, 48) New York, 49) New Jersey, 50) Minnesota, and 51) District of Columbia.
In terms of recent policy changes, it's worth noting that some states have made steps forward on providing some tax relief, such as Indiana, Arizona, Maine, Michigan, North Dakota, Delaware, Oklahoma, along with Ohio. In contrast, other policymakers worked against entrepreneurship by making state taxes less competitive, such as Oregon, Connecticut, Illinois and New York.
Where does your state rank when it comes to taxes and small business? Check out "Business Tax Index 2012" to see whether your state is friendly, or not.