NFIB State Director Jim Brown says Tennessee’s small business owners are applauding the state’s No. 2 ranking in the 2025 Rich States, Poor States report, released today by the American Legislative Exchange Council (ALEC). The annual report ranks states on economic outlook and performance. Tennessee ranked No. 12 in that category on last year’s report.

“Tennessee’s consistent commitment to low taxes and limited regulation is why we continue to be one of the best places in the country to own and operate a small business,” Brown said. “This outstanding ranking reinforces what NFIB members already know: Tennessee is open for business, and small businesses are driving our economy forward.”

Brown added, “Tennessee’s economic outlook is bright because we have no personal income or estate taxes, a stable workers’ compensation insurance system, sound fiscal policy, a constitutionally protected right-to-work law, and a low property tax burden.”

Brown said more can be done to improve the state’s business environment. That includes passage of SJR 1/HJR 2, which would give voters next year the opportunity to ban the dormant statewide property tax, which remains on Tennessee’s books. He added a proposal this year to double the tort caps on non-economic damages, which were adopted in 2011, would take Tennessee in a different direction.

“We should be reviewing ways to decrease legal costs, not increase them,” he said, noting Tennessee’s middle ranking of State Tort System Costs at No. 19.

“Tennessee’s state leaders understand that small business is the backbone of our economy,” Brown said. “We look forward to working with state policymakers to continue building on this momentum and making our state an even stronger environment for entrepreneurs and job creators.”

Tennessee’s overall economic performance ranking in the report is a solid No. 12 among the 50 states.

Click here to read ALEC’s full report.