Best: South Dakota
The top small-business-friendly state is South Dakota, which boasts, like some of the other top states, no taxes on personal income, individual capital gains, corporate income, corporate capital gains or estate transfers.

The state, home to historical Mount Rushmore, also has the lowest crime rate, a low level of state and local government spending and a low number of health insurance mandates, the SBE Council reports.

Gov. Dennis Daugaard is saddled with the task of fixing the state's budget as he takes office this month. He has said he is opposed to raising taxes, instead preferring spending cuts.

Daugaard, a Republican, plans to spur economic growth in the state by fostering innovation and encouraging business in high-tax states to move to South Dakota and businesses already in South Dakota to "increase their production and the number of people they employ," he said in his State of State Address two weeks ago.

He also said he plans to move money into the $10 million Revolving Economic Development Initiative Fund and revamp the state's "bureaucratic" microloan program for small businesses, among other measures.

"We have the best business climate in the nation, and I intend to keep it that way. Our first advantage is our low tax burden," Daugaard says.

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