Group ranks isles
last in U.S. for entrepreneurs

From staff and wire reports

Hawaii is the least friendly to small business among the 50 states and only the District of Columbia beats Hawaii for having the nation's worst environment for entrepreneurs, a survey says.

The Washington-based Small Business Survival Foundation based its ratings on state taxes, workers compensation rates and crime rates. Combining the statistics into an index, the foundation gave Hawaii a rating of 56.66 and Washington D.C. a 65.43.

States with lower numbers in the index have lighter tax burdens and stronger environments for entrepreneurship, the group said.

Ray Keating, the SBSF's chief economist, said the index takes into account taxes that affect key decisions on working, saving, investing and risk taking. They include taxes on personal income, capital gains, corporate income, property, sales, estates, unemployment and health insurance, Keating said.

Hawaii imposes tremendous costs in taxes on personal income and capital gains, he said.

The states with the best small business survival index rating are Wyoming, with a rating of 13.7, and South Dakota at 16.8. Other low-tax states, ranked in ascending order, are Nevada, New Hampshire, Washington, Texas, Tennessee, Mississippi, Alabama, Alaska and Florida.

All had indexes below 30. Nine of the low-index states impose no personal income tax, 10 have no capital gains tax and four have no corporate income tax.

The foundation is a nonpartisan, nonprofit research and education group formed in 1995.

Bloomberg News contributed to this report.

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