Want To Start A Business? Go West
October 11, 2013 by Ben Bullard
An annual report that ranks U.S. States according to how business-friendly their tax structures are indicates that people looking for a place to start a new enterprise will do best if they go West.
According to the 2014 iteration of the Tax Foundation’s “State Business Tax Climate Index,” Wyoming tops a top-10 list of business-friendly States rounded out by Florida, Indiana, New Hampshire and a handful of mostly rural western States.
Coming in at the bottom are heavily urban States along the Nation’s East and West coasts, as well as Minnesota and Wisconsin. New York ranked dead last, followed by New Jersey and California.
Texas, in many ways the poster State for low government interference and a (relatively) business-friendly tax structure, fell one spot to No. 11 this year — thanks in large part to aggressive moves from other States seeking to recruit new business, as well as Texas’ margin tax, which the report describes as “problematic” for some corporations.
The Tax Foundation emphasizes that ranking each State against the others provides an important tool to individual business owners, as well as larger companies considering their options as they seek to start up or branch out. “It is important to remember that even in our global economy, states’ stiffest and most direct competition often comes from other states,” write Scott Drenkard and Joseph Henchman in the report’s introduction:
The Department of Labor reports that most mass job relocations are from one U.S. state to another, rather than to a foreign location. Certainly job creation is rapid overseas, as previously underdeveloped nations enter the world economy without facing the highest corporate tax rate in the world, as U.S. businesses do. State lawmakers are right to be concerned about how their states rank in the global competition for jobs and capital, but they need to be more concerned with companies moving from Detroit, MI, to Dayton, OH, rather than from Detroit to New Delhi. This means that state lawmakers must be aware of how their states’ business climates match up to their immediate neighbors and to other states within their regions.
Access the full report here.