Everyone thinks their state’s got a difficult or expensive tax system. The real question is how well it stacks up against the rest.

The Small Business & Entrepreneurship Council (SBE) recently released “Business Tax Index 2008: Best to Worst State Tax Systems,” which ranks states according to how much their tax systems cost companies.

All told, the report measures systems over 16 different measures, including taxes on income, property and unemployment.

You can check out the details of the report, but we’ve got the overall results here. The five best state tax systems are:

1. South Dakota
2. Nevada
3. Wyoming
4. Washington, and
5. Florida.

Of course, it wouldn’t be a contest without losers. The five worst systems are:

1. Washington D.C.
2. New Jersey
3. Minnesota
4. California, and
5. Iowa.

Will the nation’s capital be able to hold onto the title for next year? Only time will tell.

Tags: Property taxes, SBE, Tax systems, Unemployment