Getting the Most out of Life

Top 5 Best States for Female Entrepreneurs

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As a female entrepreneur, managing your own business comes with a variety of hats: You are CEO, marketer, and, above all, accountant. When it comes to finances, you need to be on top of your gross profit, net revenue, operating expenses, and—the icing on the cake—taxes. But setting up shop is one of your top concerns. When it comes to taxes, opportunity, and potential for growth, where are some of the best states for female entrepreneurs?

The Changing Tides From 1997 Through 2013

American Express OPEN’s 2013 State of Women-Owned Businesses Report examined the opportunities for female entrepreneurs, looking at trends emerging from 1997-2013. According to the report, an estimated 8.6 million women-owned businesses are currently operating in the U.S. Together, they employ close to 7.8 million employees and garner over $1.3 trillion in revenue.

In terms of economic clout, Washington, D.C., rates as the top location for female entrepreneurs. But with a top income tax rate of 8.95 percent, there are other locations that will not only provide great epicenters for entrepreneurship, but also allow you to save a little extra on the side. Based on opportunity and tax rates, here are our top five states for female entrepreneurs:

1. Nevada

There’s more to this state than the alluring glow of Sin City. In fact, Nevada boasts no personal income tax, corporate capital gains tax rate, or corporate income tax. Additionally, with the state and local property taxes as a share of income at 2.896 percent, Nevada is our number one state for female entrepreneurs looking to save on taxes. And thousands of women are already taking advantage: Nevada has an estimated 61,200 women-owned firms that employ 63,700 people! Since 1997, American Express reports that Nevada has witnessed an almost 84 percent growth in female-owned firms and almost 29 percent in employment growth.

2. South Dakota

South Dakota may seem like an unlikely contender, but this non-income-tax state has produced over 116 percent growth in revenue and 32 percent growth in employment from female-owned businesses since 1997. With a top personal income, corporate income, and corporate capital gains tax rates of 0 percent, South Dakota ranks second in our list of best states for female entrepreneurs.

3. Texas

With no state taxes on personal and corporate income or on corporate capital gains, it’s no wonder why Texas ranks third on our list of the best states for female business owners. With 93 percent growth in female-operated firms in the past 20 years, the Lone Star State’s blend of eclectic music, great food, and a huge expanse of the outdoors to explore provides blossoming opportunities in countless fields.

4. Wyoming

Spectacular outdoor landmarks and national parks such as Yellowstone sprinkle the state ranked at number four for female entrepreneurs. Personal and corporate income are not taxed in the Equality State, and neither are corporate capital gains. Businesses geared toward energy and the great outdoors are said to do well in Wyoming. And with 168 percent growth in female-run firms across the state since 1997, you will not be alone.

5. Washington

Though it may rain from time to time in Washington, this state is one of the few with no personal and corporate income taxes or taxes on corporate capital gains. State and local property taxes as a share of income are slightly lower than Nevada at 2.867 percent. Still not sold? Consider the large corporations that are located right next door: Expedia, Nordstrom, Microsoft, Amazon, and Starbucks.

While the numbers are certainly important when determining where to open a business, it’s important to keep in mind that financial benefits will vary by state depending on the type and size of business you operate. As a female entrepreneur, you should weigh both the tangibles and intangibles of building your business successfully and also look to demographics and market accessiblity when laying your foundation.

Mary Beth is shaking up traditional views of financial planning by leveraging technology to work with GenYers across the country to help them make smart choices with their money. She is a Certified Financial Planner™ and Founder of Workable Wealth. Her expertise has been featured in The Wall Street Journal, CNBC, Forbes and more.