Small business owners, entrepreneurs, and innovators are at the heart of the American Dream. The desire of millions of Americans to go out on their own and start a business is the source of countless inventions that make our lives easier, products and services that we need and use every day, and millions of new jobs. In fact, small businesses are responsible for 66 percent of new jobs over the last 25 years.
But starting your own business is not easy. And there is one obstacle many underestimate when starting their first business: government regulations. A 2017 survey of entrepreneurs and small business owners found that the average regulatory cost for a new business in its first year is more than $83,000.
If Tennessee wishes to have a thriving economy in the future, we must identify and pursue reforms that make Tennessee the easiest place to start a business and create an economic environment that allows all entrepreneurs to flourish without onerous government regulations.
Here at Beacon, we pride ourselves in working with the communities our policies seek to help. At the beginning of 2022 we established an Entrepreneurship and Innovation Council — comprised of some of the state’s leading entrepreneurs and innovative policymakers — to identify the barriers that should be eliminated and the market-friendly policies that should be adopted to fuel entrepreneurship. Entrepreneurs by their nature are problem solvers and they know better than anyone what actual hurdles prevent them from achieving their visions.
Throughout the year Beacon staff worked to support the Council on their mission by providing research and connections with state and national experts to give them the information they needed to identify the policies and solutions needed to make Tennessee the capital of entrepreneurship and innovation in the United States. In total, the Council put forth 14 recommendations that will help all Tennessee businesses from the mom-and-pop shops to the high-tech start-up. Some of the recommendations include:
- Create a “Free to Be in Tennessee” campaign where an individual’s cost for filing their first business is waived by the state.
- Eliminate the Business Tax, a tax on a company’s sales that punishes small and newer companies, ideally immediately or through a phaseout like the Hall Income Tax.
- Clarify the “token taxonomy” of blockchain-based assets by defining cryptocurrencies as property, but property that is exempt from tangible property taxes.
- Expand Tennessee’s business court pilot project and adopt Delaware business case law except where it contradicts existing Tennessee statutes.
Our proposals are by no means an exhaustive list of reforms that would help foster entrepreneurship and innovation in Tennessee. However, we and the Council believe they would create the environment for all businesses to thrive by reducing barriers and costs. We also believe these reforms would make Tennessee a leader in emerging sectors through reforms that foster the adoption and utilization of revolutionary technologies. Given the opportunity and environment to thrive, Tennessee business owners are problem solvers and innovators, and it was an honor to work with a few of them to create this roadmap for the state. It is now time for state policymakers to act and create that environment.
For the full report and list of the Council’s recommendations, click below.