South Dakota:  There is no personal or corporate income tax and the sales tax is 4%.  “The favorable tax climate is a draw for penny-pinching startups.”

Texas:  Has no personal or corporate income tax but it does have a gross receipts and franchise tax.  Theses taxes charge businesses 0.5% of revenues if they are in retail and 1% of revenues for non-retail businesses.  To help small business during the recession the state legislature recently raised the revenue exemption level to $1 million, up from $300,000.

Montana: No Sales Tax!  “Despite skipping that revenue stream, the state’s coffers are overflowing: Montana is one of just two states currently in the black, running without a budget deficit. Corporate income and property tariffs are also competitively low. The Tax Foundation ranked Montana as the sixth most business-friendly state when it comes to taxation.”

Tennessee: No personal income tax but it does have a 6.5% corporate income tax.  “Still, as one of just nine states that goes without income taxes on salaries, Tennessee’s “live free!” ethos attracts a fair number of entrepreneurs.”