Baldwin County ranked #2 for 2021 Best Places for Small Business Owners
Out of over 50 counties in the state of Alabama, Baldwin County ranked #2 for best places to own a small business coming in with 26.48% in small business returns and 10.43% in small business income.
Other counties making the list are:
#1 - Shelby, AL
#2 - Baldwin, AL
#3 - Jefferson, AL
#4 - Marshall, AL
#5 - Houston, AL
#6 - Winston, AL
#7 - Culman, AL
#8 - Lee, AL
#9 - Clay, AL
#10 - Mobile, AL
To determine the best places for small business owners, our study measured three factors: the proportion of people in a county with small business income, the reported business income, and the amount of tax a potential resident must pay on their income.
To determine how attractive a region is for small business owners, we compared the number of tax returns that report small business income and compared that to the total tax-filing population of the region. Next, we compared the total amount of small business income to the overall amount of income reported in each region.
Small businesses are typically incorporated as pass-through entities, meaning that the business owners pay income taxes on the company profits rather than the company itself paying income tax. Because of this, income taxes can play a major role in determining the financial success of a small business. To determine income tax burdens across counties, we used the national median household income and then applied relevant deductions and exemptions before calculating federal, state and local income taxes for each location.
These three factors were then indexed and equally weighted to yield our Small Business Index. Places with the highest Small Business Index are the places which ranked the highest in the study.