Colorado fares well in small business policy analysis

Raymond Keating
Raymond Keating

Colorado continues to fare comparatively well in an annual analysis of how tax systems affect small businesses and entrepreneurs.

Colorado came in 13th in the 2017 Small Business Policy Index compiled by the Small Business & Entrepreneurship Council.

Colorado assesses comparatively low income taxes and fuel taxes, while ranking near the middle for sales and property taxes.

The council, a small business advocacy and research group based in Washington, D.C., takes into account 55 policy measures in calculating the index — and cumulative effects on small businesses.

“In the end, the greater the governmental burdens — via taxes, regulations, spending, debt and failures to adequately execute the essential duties of government — the greater the negatives for economic risk taking, small businesses and the state’s competitiveness and attractiveness,” said Raymond Keating, chief economist of the council and author of the analysis.

States that rank in the top half of the index experience economic and population growth at a faster pace than states in the bottom half, Keating said.

Karen Kerrigan, president and chief executive officer of the council, said policies matter in starting, operating and investing in small businesses. “That is the case at all levels of government — federal, state and local. Getting policy right makes a big difference in terms of boosting a state’s economy, job creation and competitiveness.”

With a top rate of 4.63 percent, Colorado assesses the 10th lowest corporate income taxes, 12th lowest corporate capital gains taxes, 16th lowest individual dividends and interest taxes, 19th lowest personal income taxes and 21st lowest individual capital gains taxes.

Colorado imposes the 10th lowest diesel tax at 20.5 cents a gallon and 13th lowest gasoline tax at 22 cents a gallon.

Colorado ranked 16th for the lowest workers’ compensation insurance premiums and 19th for the lowest unemployment taxes.

Colorado came in near the middle of the pack in ranking 21st for state and local sales taxes and 25th for state and local property taxes.

Colorado ranked 27th in a measure of state and local government spending compared to the national average and 37th for a five-year increase in state and local government spending. The number of state and local government employees per 100 residents in Colorado ranked 20th.

Nevada and Texas ranked first and second, respectively, in the 2017 Small Business Policy Index followed by South Dakota in third. The top 10 states also included Wyoming, Florida, Washington, Indian, Arizona, Alabama and Ohio. Many of the top-ranked states impose no corporate or personal income taxes.

California ranked last in the 2017 index followed by New Jersey, New York, Minnesota and Vermont. Hawaii, Maine, Connecticut, Iowa and Oregon rounded out the bottom 10.