The US consistently ranks among the best countries in the world to conduct business, which is a strong statement about how much the country advocates for starting new companies. However, as the country is comprised of 50 states, each with its own unique business policies and laws, operating in California varies significantly from conducting work in Florida. 

24/7 Wall St. Key Points

• • The most business-friendly states haven’t changed much in recent years. 
  • The best states offer low corporate tax rates. 
  • Qualify of life and cost of living also play a role.
  • Also: Click here to see how much more you could be earning on your savings today. It takes just a few minutes and your money could be working for you. ^(Sponsor)

 

According to data compiled by Shopify, what’s most important to know is that some states offer a better business environment than others. Ultimately, this means you can choose which state you’d want to establish as your new home base. This means the biggest question left unanswered is whether your state is one of the best. 

10. Washington

• Corporate tax rate: 0%
• Business filing fee: $180
• Small business employees: 1.4 million
• Small businesses 657,529 (99.5% of Georgia businesses) 
• Sales tax: 0%

A Business Giant

Considering that Washington is home to one of the country’s most highly educated and skilled workforces, it is no surprise that it makes the top ten business-friendly states. Home to some of the country’s biggest names, like Microsoft, T-Mobile, Amazon, and Starbucks, the lack of a corporate tax rate has made Washington a hub for businesses large and small. 

9. Virginia

• Corporate tax rate: 6%
• Business filing fee: $100
• Small business employees: 1.6 million 
• Small businesses 795,624 (88.6% of Georgia businesses) 
• Sales tax: 5.3%

Virginia Is For Business

Considering the state’s proximity to Washington, D.C., Virginia has long been a hub of businesses large and small. The state’s low corporate tax rate has given it a big push, and you can access many of the major business hubs along the eastern seaboard. Historically, Virginia has been ranked in the top spot according to CNBC, so it’s not unheard of to label Virginia as friendly to businesses. 

8. Utah

• Corporate tax rate: 4.85%
• Business filing fee: $54
• Small business employees: 625,571
• Small businesses 313,590 (99.3% of Georgia businesses) 
• Sales tax: 6.1%

Western US Business Friendly

One of the most business-friendly western states in the US, Utah offers several significant reasons to do business there. Its low corporate tax rate is one of the most attractive reasons, but so is the state’s skilled workforce, strong economy, and fast-growing technological infrastructure, making it an appealing destination for hundreds of thousands of small businesses. 

7. Texas

• Corporate tax rate: 0.375%
• Business filing fee: $300
• Small business employees: 4.9 million
• Small businesses 3.1 million (99.8% of Georgia businesses) 
• Sales tax: 4%

Fantastic Corporate Tax Rate

With one of the best corporate tax rates in the nation, Texas, the 8th largest economy globally, is a very attractive business home. Setting up a business costs just $300, and with 3.1 million small businesses in the state, this small filing fee has clearly helped incentivize millions to move to Texas. You also get the benefit of tax credits, job creation incentives, and even startup financing support upon qualification. 

6. Tennessee

• Corporate tax rate: 6.5
• Income tax: 0%
• Small business employees: 1.2 million
• Small businesses 652,795 (99.5% of Georgia businesses) 
• Sales tax: 4%

Everyone Loves Nashville

Boosted by fast-growing Memphis and Nashville, high-tech growth is increasing the number of small businesses calling Tennessee home. For owners and workers of these small businesses, the state’s friendliness is aided by its lack of income taxes, which saves every worker hundreds, if not thousands of dollars annually. As a bonus, Tennessee also ranks high for supporting strong mentorship programs. 

5. North Carolina

• Corporate tax rate: 2.5%
• Business filing fee: $125
• Small business employees: 1.78 million 
• Number of small businesses: 994,576 (99.6% of North Carolina businesses
• Sales tax: 4.75%

Frequently High-Ranked

North Carolina is a top-ten staple for being one of the most business-friendly states in the country. It’s ranked number two by CNBC and number four by PGC Group, all of whom think the state will soon be the most business-friendly in the nation. With a skilled workforce, low tax rates, a mild climate, and a highly educated community, the state remains one of the country’s fastest-growing economies. 

4. Minnesota 

• Corporate tax rate: 9.8%
• Fortune 500 presence: 17 headquarters (Target, 3M, Best Buy, UnitedHealth Group)
• Small business employees: 1.3 million
• Business filing fee: $30-$50
• Sales tax: 6.875%

Great Quality of Life

There are many strong reasons why Minnesota is a favorite of businesses, including having one of the highest overall resident happiness scores. For this reason, it is no surprise that 17 Fortune 500 companies, including Target, call Minnesota home. This ranks the state as number three in the nation based on Fortune 500 companies per capita and number two for economic opportunity. 

3. Georgia

• Corporate tax rate: 5.75%
• Fortune 500 presence: 440 companies located in George
• Small business employees: 1.7 million
• Small businesses 1.2 million (99.6% of Georgia businesses) 
• Sales tax: 4%

Fast-Growing State Economy

Georgia should be on your list when considering states with a fast-growing economy. Atlanta is one of the country’s largest metropolitan areas, and the state offers several incentives to attract businesses, including specialized tax credits and exemptions. In addition, the state is home to the principal or regional headquarters of 440 of the top 500 companies in the country. 

2. Delaware

• Corporate tax rate: 8.7%
• Business filing fee: $90
• Business license fee: $75
• Top company headquarters: 6.78 (per 1 million residents)
• Sales tax: 0%

Fortune 500 Haven

Thanks to Delaware’s business-friendly laws, the state is home to 68.2% of all Fortune 500 businesses, at least on paper. When you consider that nearly 80% of all US Initial Public Offerings (IPOs) occur out of Delaware, it’s clear there is a reason why the state is so business-friendly, which is especially true within the finance and tech sectors. As a bonus, the state has no income tax, and it costs under $200 to establish a business filing and business license. 

1. Colorado

• Corporate tax rate: 4.40%
• Registered small businesses: 691,230 (99.5% of state businesses)
• Small business employees: 1.2 million
• Sales tax: 2.9%
• Startup cost: $50

Lowest Setup Costs

Colorado has the nation’s lowest setup costs for small businesses at just $50 to set up an LLC. Colorado also has one of the country’s most educated workforces, considering it’s the second-most educated state. Still, a favorable tax climate of just a 4.55% income tax rate ensures Colorado is a fan favorite for business employees, large and small. When you factor in the quality of life in Colorado, it’s a no-brainer for being business-friendly. 

 

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.