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Colorado ranks among most business-friendly states

Colorado continues to rank among the most business-friendly states in the latest results of an annual comparison of how taxes and government policies affect small businesses and entrepreneurs.

Raymond Keating

Colorado ranks ninth overall in the 2011 Small Business Survival Index on the basis of comparatively low taxes.

The Small Business & Entrepreneurship Council — a small business advocacy and research group based in Washington, D.C. — calculates the index to offer a state-by-state look at how public policy decisions affect business climates. The 2011 index takes into account 44 government-imposed or -related costs to determine overall ratings.

“Elected officials have a clear choice. They can expand government, tax too much and overregulate and thereby restrain entrepreneurship, small businesses and the economy. Or, they can provide a climate of low taxes, reasonable regulation and limited government spending, which is critical for economic, income and employment growth,” said Raymond Keating, chief economist of the SBEC.

“Unfortunately, as illustrated by the Small Business Index, too many elected officials just don’t get it and impose costly policies that chase away entrepreneurs, businesses, capital and jobs,” Keating added.

Colorado consistently ranks among the most business-friendly states in the index at 10th in 2010 and 2008 and eighth in 2009 and 2006.

Colorado never has ranked lower than 12th since 2001.

Colorado ranks 10th in the SBEC 2011 State Business Index comparing the cost of state tax systems on entrepreneurship and small businesses.

Colorado ranks high in the latest Small Business Survival Index in large part because of its comparatively low taxes. The state assesses a top rate of 4.63 percent for corporate and personal income and capital gains taxes. That ranks eighth lowest for corporate income tax, 10th lowest for corporate capital gains tax, 17th lowest for personal income tax and 19th lowest for personal capital gains taxes. The state assesses the 10th lowest unemployment tax.

Measured as a proportion of personal income, Colorado assesses the 14th lowest state and local sales, gross receipts and excise taxes and the 21st lowest state and local property taxes. At 22 cents a gallon, the state tax on gasoline is tied for 17th lowest.

Colorado fared even better with a tie for fifth in an analysis of state and local government spending trends over the five-year period between

2003 and 2004 and 2008 and 2009. The state ranks 23rd, though, in an analysis of per capita government spending between 2008 and 2009.

Colorado fares worst in the 2011 index in terms of the number of state-imposed health insurance mandates. The state ranks 41st out of the 50 states.

Overall, South Dakota remains atop the ranking of most business-friendly states, followed by Nevada, Texas, Wyoming and South Carolina.

New York falls to the bottom of the 2011 index, followed by New Jersey, Vermont, Rhode Island and California.


The Business Times has served as the definitive source for Grand Junction business news since 1994. The journal offers news, views and advice you can use twice each month in print with daily updates online at www.TheBusinessTimes.com
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