By Debbie Gregory.

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All businesses pay taxes, there is not any way of getting around it.   However, depending on where you start and operate your business, you may be able to minimize the amount of taxes that you pay. We aren’t just talking about income or property taxes either. Certain taxes are higher than others and each state has its own tax rate for each item taxed.   Taxes such as property, sales, excise, unemployment insurance, franchise, and income taxes for both the business and your personal income vary depending on where you live and run your small business.


What are the best states in the nation to start a business and minimize your overall taxes?

  • Alaska: Alaska has no sales tax and no personal income tax. It does have particularly high excise taxes as well as some of the highest property taxes nationwide.
  • Florida: Florida has no personal income tax, but their sales tax is 6% and is higher and lower than other states. Florida excise tax is also quite high.
  • Ohio: Ohio is one of the six states that does not have corporate taxes.  However, Ohio is the seventh highest personal taxes in the country.  The sales tax rate in Ohio is 5.75%
  • Nevada: Nevada has no corporate income tax and no personal income tax. Property taxes are also fairly low. However, they the sales tax rate in Nevada is on the high side at 6.85%.
  • New Hampshire: There is not an income tax and the sales tax is zero and cities and municipalities do not have a sales tax.  There is an 8.5% tax assessed on income from conducting business within the state of New Hampshire.
  • South Dakota: South Dakota has no corporate income tax and no personal income tax. Their sales tax is quite low at 4.5%. However, the franchise tax rate in South Dakota is high.
  • Tennessee: There is no state income tax but Tennessee has one of the highest sales taxes at 7% and cities and counties can add as much as another 2.75%.  Tennessee’s excise tax, which effectively is an income tax, is a flat 6.5% tax on net earnings from doing business in the state.
  • Texas: Texas does not have a state income tax, but the sales tax rate is 6.25% and localities can also add their own sales tax rate, so it is as high as 8.25%.  Texas does not have corporate taxes.
  • Washington: Washington is one of the states without state income tax.  However, the sales tax rate is 6.5% and depending on local municipalities, the total sales tax can be as high as 10.4%.  There is also a business and occupation tax (B&O).
  • Wyoming: Wyoming has no corporate income tax and no personal income tax. Their sales tax is one of the lowest in the entire nation at 4%. However, their property taxes are quite high.


VAMBOA hopes this state tax information is valuable to you and your business.