Survey: Texas, Utah, Idaho Most Business-Friendly States

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For the third year in a row, Thumbtack.com, in partnership with the Ewing Marion Kauffman Foundation, has just released the largest small business survey of its kind, taking an in-depth look at what makes a small business-friendly environment.

On a state level, Texas, Utah, and Idaho ranked highest for business-friendly climates for every year the survey has run. In contrast, California, Rhode Island, and Illinois were given a rating of “F” for least business-friendly environments.

Evaluating the local level Sacramento, Providence and Buffalo rated as the worst-performing cities by business owners.

“It is critical to the economic health of every city and state to create an entrepreneur-friendly environment,” said Dane Stangler, vice president of Research and Policy at the Kauffman Foundation. “Policymakers put themselves in the best position to encourage sustainable growth and long-term prosperity by listening to the voices of small business owners themselves.”

Approximately 13,000 businesses were asked to rate how friendly states and cities were for conducting business across 11 different metrics. The most important factor chosen consistently by small businesses was professional licensing requirements, followed closely by ease of tax filing.

Tax rates ranked lower than regulatory burdens in impact to small businesses, which is highlighted by the fact that only 19 percent of respondents are currently prepared for the implementation of the Affordable Care Act. Most small business owners felt that they paid their fair share of taxes.

“Creating a business climate that is welcoming to small, dynamic businesses is more important than ever, but rarely does anyone ask small business owners themselves about what makes for a pro-entrepreneur environment,” says Jon Lieber, chief economist of Thumbtack.com.

“Thousands of small business owners across the country told us that the keys to a pro-growth environment are ease of compliance with tax and regulatory systems and helpful training programs.”

The survey included 82 cities and 50 states, with responses from more than 12,000 entrepreneurs.

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