Alabama Ranks 7th in Nation for Entrepreneur-Friendliness

Date: February 10, 2015

Alabama Ranks 7th in Nation for Entrepreneur-Friendliness

The Small Business Policy Index 2014 rated Alabama No. 7 in the nation for most entrepreneur-friendly states.

In its 19th edition, the index measures 42 factors regarding taxes, regulations, government spending and debt, and other government activities. Alabama was the leader of the pack for state and local property taxes as well as in the energy regulatory index. The state fared in the top 10 for top corporate income tax rates, corporate capital gains tax rates and unemployment taxes.

These could also explain why Alabama has attracted corporate giants like Mercedes-Benz, Airbus and Hyundai to open plants in the state. Bruce Ely, a partner at Birmingham law firm Bradley Arant Boult Cummings, says these big companies result in creation of smaller companies.

“The fact that Alabama has some of the lowest rates for corporate income and property tax also creates a pro-business atmosphere,” Ely told the Birmingham Business Journal.

On the other hand, Alabama fell short in crime rates (No. 43) and state and local revenue from the federal government (No. 41).

Overall, the index rated South Dakota best for entrepreneurs, and California last. Alabama ranked seventh on 2013’s list too, though the criteria has changed since then.

The study also linked the better performing states, on average, to better economic growth and population growth.

“Make no mistake, tax, regulatory, government spending, and other governmental performance and cost measures matter state by state,” Raymond J. Keating, SBE Council’s chief economist and author of the study, said in a statement. “Consider that when it comes to economic growth, population growth and shifts in population among the states, for example, the top 25 states on the index perform, on average, far better than the bottom 25 states.”

Is Alabama a small business-friendly state? Tell us why or why not in the comments section below.


Related Content: Small Business News | Alabama | Economy

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