South Dakota. of course if you are on the recieving end of the low wage low to no benefits conditions that attract business you might not be so happy. http://www.argusleader.com/article/...Dakota-friendliest-state-small-business-again South Dakota once again ranks No. 1 in the nation for friendliness toward small business. ItÃ¢â¬â¢s the seventh year in a row the state received the recognition from the Small Business Entrepreneurship Council. The study examined 44 government-imposed or government-related costs affecting small businesses and entrepreneurs. Factors included taxes, regulatory costs, government spending and debt, property rights, health care policies and energy costs. The study highlighted South DakotaÃ¢â¬â¢s tax policy, including no state taxes on personal or corporate income or capital gains, and no death taxes, and also recognized low crime rate, few health insurance mandates and low levels of government spending.