Marin County Named State’s No. 1 Place for Small Businesses

Entrepreneurs are choosing Marin County.

Marin County is California’s best place for small business owners, according to a recent report by SmartAsset.

The personal-finance website based its findings on recent tax records and reported small-business income. The study measured five factors: the proportion of people in a county with small business income; the reported business income; the amount of tax a potential resident must pay on their income; the five-year change of small business tax returns; and the five year change of small business income.

According to SmartAsset, “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, the site compared the total amount of small business income to the overall amount of income reported in each region—and then measured the change in those variables over a five-year period.

Marin County finished first in two of the primary factors measured: the percentage of tax returns that claimed small-business income (42.32%); and the proportion of small-business income out of all reported income (15.6%). The result was a score—what it calls its Small Business Index—of 79.86, the highest of any county in California.

In comparison, Sonoma County’s percentage of tax returns that claimed small-business income was 25.96%, while its proportion of small-business income comprised 9.35% of reported income in the county. Overall, Sonoma County placed as the state’s 10^th best place for small-business owners, according to the survey.

“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,” SmartAsset points out. “Because of this, income taxes can play a major role in determining the financial success of a small business.”

For a broader look at the results, visit smartasset.com.