WINCHESTER — Clarke County ranks among the top places in Virginia for small businesses, according to a recent study released by SmartAsset.

The study digs into IRS data to find places in the United States where small businesses are “most prominent,” according to SmartAsset. The company also explained that the data is examined from counties across the U.S. to “find the places with the most small business owners and the most small business income.”

Criteria boiled down to the proportion of people in a county with small business income, how much business income those people reported and the amount of tax a potential resident must pay on their income.

Localities are then given an index value based on their performance.

Clarke County ranked eighth among localities in Virginia, and was the only locality in the Northern Shenandoah Valley area to crack the top 50. It ranked 1,426th nationally.

In 2019, Clarke County was ranked 10th in the same study.

According to the methodology of the study, to determine how attractive a region is for small business owners, the number of tax returns that report small business income was compared to the total tax-filing population of the region. Next, the total amount of small business income was compared to the overall amount of income reported in each region.

“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,” the study explained. “Because of this, income taxes can play a major role in determining the financial success of a given small business. To determine income tax burdens across counties, we used the national median household income. We then applied relevant deductions and exemptions before calculating federal, state and local income taxes for each location.”

These three factors were then indexed and equally weighted to yield the small business index. Places with the highest small business index are the places which ranked the highest in the study.

Elsewhere in Virginia, the rest of the Top 10 went Rappahannock County, Goochland County, Falls Church, Fairfax County, Highland County, Abermarle County, Loudoun County, Alexandria City and Lancaster County. Rappahannock and Goochland both ranked in the top 1,000 places in the U.S. for small businesses.

Regionally, Clarke County was given an index rating of 39.52. Winchester was ranked No. 51 with an index of 27.12, Frederick County was No. 62 with a 25.92, Shenandoah County was No. 66 with a 25.48 and Warren County was No. 79 with a 24.36. Nearby Jefferson County in West Virginia was ranked seventh for the Mountain State.

Nationally, the top 10 localities were Petersburg Census Area, Alaska; Sully, South Dakota; Haskell, Kansas; Throckmorton, Texas; Bristol Bay, Alaska; Miami-Dade, Florida; Gaines, Texas; San Juan, Washington; Glasscock, Texas; and Monroe, Florida.

— Contact Matt Welch at

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