Nevada still a top business venue – let’s remind ourselves why
These days we’re all on the lookout for even a hint of a sign that economic recovery is on the Silver State’s horizon. We analyze every economic indicator and rejoice at even the slightest uptick in statistics that point toward an economic rebound. What I personally find most interesting about our current state of affairs is that even while we’re anxiously wringing our hands, the rest of the nation continues to tout the many positive factors that make up our state’s overall business climate. Do they know something we don’t? Actually, I believe they know something of which we just need to be reminded.
Recently the Small Business & Entrepreneurship Council (SBE Council) published the "Business Tax Index 2010: Best to Worst State Tax Systems for Entrepreneurship and Small Business," which ranks the 50 states and District of Columbia according to the costs of their tax systems for entrepreneurship and small business. Despite the recession, Nevada took the number one ranking in several key areas:
Personal Income Tax: The report noted that state personal income tax rates affect individual economic decision-making in important ways and that a high personal income tax rate raises the costs of working, saving, investing and risk taking. The report also indicates that personal income tax influences business far more than generally assumed because more than 90 percent of businesses file taxes as individuals (e.g., sole proprietorship, partnerships and S-Corps.), and therefore pay personal income taxes rather than corporate income taxes.
Corporate Income Tax: The SBE report indicates that state corporate income tax rates similarly affect a broad range of business decisions, most clearly, decisions relating to investment and location, and obviously make a difference in the bottom line returns of corporations.
Individual Capital Gains Tax: One of the biggest obstacles that start-ups or expanding businesses face is access to capital. Simply put, high capital gains taxes further restrict access to capital and decrease the likelihood of individuals and start-ups taking even calculated risks.
Corporate Capital Gains Tax: The report again notes the importance of small businesses’ access to capital, pointing out ways in which state capital gains taxes affect the economy by directly reducing the rate of return on investment and entrepreneurship.
SBE Council President & CEO Karen Kerrigan noted in the report, "States that have kept taxes low will reap rewards as their businesses recover more quickly and shore-up durability for the long term. Low-tax states will become even more competitive for investment and business relocation."
I think it’s important for us all to remember that despite the bumps currently in our road, the foundation for small business and entrepreneurial endeavors in Nevada remains the same: solid, unique and viable.
