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Business and Economy

New survey shows California's regulations are not popular with small business owners

Flickr member Phil Whitehouse

A survey out this week shows small business owners rank California near the bottom of a nationwide survey showing which cities and states offer the most business-friendly environments.

More than 12,000 business owners participated, making it the largest of its kind according to, the company that conducted it.

California received a grade of F for its friendliness towards small business, one of the worst grades in the country. The state received low marks for its regulations, earning a grade of F for its labor, health and safety, and environmental regulations, and a D for its tax code, licensing, and zoning laws.

The state's best grade was a B- for the ease of hiring new workers.

What may come as a surprise to some is that more than half of California's small businesses said they paid the right share of taxes, in line with the national average. California is often targeted for being a state that overtaxes on the business front.

Of the 82 cities surveyed, seven of the lowest rated were found in California, including San Jose (#68), Santa Rosa (#70), Riverside (#71), Los Angeles (#74), Oxnard (#76), San Diego (#78), and Sacramento (#82)—the worst ranking possible.

The top rated states overall were Utah, Idaho, Texas, Virginia and Louisiana. The lowest rated were Rhode Island, Illinois, California, Connecticut and New Jersey.