This article is taken from Enterprising States, a study produced by the National Chamber Foundation. The study was released at the U.S. Chamber's annual Jobs Summit on June 13, 2012.

A reasonable tax code and a sensible, predictable regulatory environment can encourage investment and business expansion by enabling entrepreneurs and managers to look forward with confidence and to plan for the future.

The combined burden of excessive delays, uncertainty, regulations, and taxes (DURT) can inhibit new job creation and jeopardize existing jobs. States do not enact tax or regulatory changes in a vacuum and every change will affect a state's competitive position relative to its neighbors and to locations around the world.

Most states have taken a comprehensive look at their taxes and regulations in recent years by establishing special commissions or legislative committees to identify and implement reforms that will foster rather than thwart business development. In a growing number of states, impact studies are now required whenever a new regulation, a new rule or a new tax is proposed to determine the consequences for business growth and job creation.

Overall, governors and legislatures now recognize that being enterprise-friendly is necessary in a global economy that offers businesses and individuals more choices than ever before.

A combination of six metrics determines the top states for taxes and regulation states:

• Closure rate of business establishments
• Tax environment for mature firms (Tax Foundation)
• Tax environment for new firms (Tax Foundation)
• Overall business tax climate index according to the Tax Foundation
• The Small Business Survival Index produced by the Council for Small Business and
• Entrepreneurship
• Cost of living

The following states are the top 10 performers for 2012:

1. South Dakota – Long known for its positive business climate, especially for finance firms, South Dakota ranks in the top five in four categories: business closure rate, tax environment for mature firms, overall tax environment for business, and the small business survival index. The state launched a “Better Government” initiative in 2011 to review its regulatory climate and to streamline state interactions with businesses.

2. Wyoming – Wyoming is a top-10 state in four business-climate metrics, including first in overall state business-tax climate and first in tax environment for mature firms. The state also ranks ninth in tax environment for new firms, making it one of the most advantageous overall for business.

3. Ohio – Ohio ranks in the top 15 in five of the six tax-and-regulation measures. The state fares well in the Tax Foundation’s study of business-tax environments, ranking fifth for mature firms and third for new firms. The Buckeye State is seventh in the small business survival index, has the 13th-lowest rate of business closure, and the 15th-lowest cost of living in the nation.

4. Kentucky – The Bluegrass State ranks no worse than 22nd on any business-climate measure and is a top-five state in tax environment for new firms and cost of living. Governor Steve Beshear created a Governor's Blue Ribbon Commission on Tax Reform by executive order in 2012, a special commission to hold public hearings and to make recommendations on improving the state’s business climate.

5. Oklahoma – Efforts to improve the Sooner State’s business climate are paying off, as evidenced by the state’s elevation into the top 10 of this year’s rankings, a climb of eight spots. The state has the lowest cost of living in the nation and is the fifth-best tax environment for startup firms. In 2011, the legislature passed a series of aggressive reforms to improve the state’s legal environment for business and reduce frivolous lawsuits.

6. Nebraska – Nebraska lands at sixth in this year’s Taxes and Regulation rankings by placing 11^th or better in five of the six metrics. The state has the top tax environment for startup firms, the ninth-best tax environment for mature firms, the third-lowest business closure rate in the nation, and the 11th lowest cost of living.

7. Texas – One of the secrets to Texas’ success is its low cost of living, the third lowest in the nation. Texas ranked 23rd or better on five of six business climate measures, yet it recently passed tort reform legislation including a “loser pays” provision to help discourage frivolous lawsuits.

8. Alabama – Alabama ranks 22nd or better on all six metrics, including sixth on the small business survival index. Looking to make dealing with taxes a simpler process for businesses in Alabama, the state has been considering the adoption of new streamlined business-tax-filing legislation. The proposed law would create a “ONE SPOT” system allowing businesses to file several different classes of taxes through one system

9. Utah – Utah lands in this year’s top ten by placing tenth or better on five of the six business climate measures, led by a sixth-place ranking in tax environment for mature firms and the sixth-lowest cost of living in the nation. The state is tenth in two tax measures, overall business climate and climate for new firms.

10. Louisiana – Louisiana finishes tenth on the strength of its job creating tax climate. The state is second in tax climate for new firms and tenth in tax environment for established firms. Louisiana has the seventh-lowest business closure rate in the nation, an indication that the state is fertile ground for business.