Top and Bottom - According to a recent survey, the top 5 states for entrepreneurship are Massachusetts, North Dakota, California, New York and Minnesota - and the bottom 5 are Kentucky, Mississippi, South Carolina, Michigan and Louisiana.

State Entrepreneurship Index Puts Massachusetts at the Top

According to the University of Nebraska’s State Entrepreneurship Index (SEI), the following are the top 10 states for entrepreneurial activity - 1. Massachusetts, 2. North Dakota, 3. California, 4. New York, 5. Minnesota, 6. Oregon, 7. New Jersey, 8. Texas, 9. Illinois and 10. New Hampshire. The bottom 10 are as follows - 41. Georgia, 42. Iowa, 43. Nevada, 44. Alabama, 45. Hawaii, 46. Kentucky, 47. Mississippi, 48. South Carolina, 49. Michigan and 50. Louisiana. The SEI is an annual state-by-state measurement of entrepreneurial activity of all 50 states.

Being a Top State for Business Taxes Does Not Translate to Being a Top State for Entrepreneurial Activity

Of the top 10 states in the SEI rankings, only two, Texas and New Hampshire, made the top 10 in the 2013 State Business Tax Climate Index from the Tax Foundation. In fact, 4 of the top 10 best states for entrepreneurship are ranked in the bottom 10 of the State Business Tax Climate Index (California, New York, Minnesota and New Jersey). The Tax Climate Index “enables business leaders, government policymakers, and taxpayers to gauge how their states’ tax systems compare.” This comparison between the two indexes’ results tends to show that a state’s tax climate does not necessarily dissuade entrepreneurial activity from flourishing.

Source: University of Nebraska’s State Entrepreneurship Index, Tax Foundation 2013 State Business Tax Climate Index