Best states in the US to start a business in 2024
Entrepreneurs are increasingly understanding the importance of location when it comes to launching a business. Location is pivotal in many ways as it determines accessibility of the resources, cost of setting up, transportation costs, etc. Needless to say, the state's tax policies also matter a lot when setting up a business. Besides having strong economies, states should also be able to offer more when it comes to setting up a business. Here are the top 10 states in the US that are ideal for setting up a new business, according to WalletHub's annual report. These states offer low tax rates, low filing costs, and more.
1. Utah
According to WalletHub, Utah is a great place to start a new business. The reason why Utah has clinched the top position is because the state has great tax policies. Utah has a flat 4.85% individual income tax rate and a flat 4.85% corporate income tax, which are the lowest in the country. Additionally, Utah also has low filing fees, which is around $70 for the form to file the entity, and $15 per year for the annual reports. Utah was recognized as one of the best states on the “Digital States Survey” from the Center for Digital Government.
2. Georgia
Georgia is known for its stable economy that ensures economic development and a free market-oriented economic policy with low tax rates. Georgia is also known for being extremely diverse, so it's safe to say that there's something for everybody in the state of Georgia when it comes to starting their venture. The state has one of the highest entrepreneurship rates and there's a lot of potential for growth in the state. Georgia is also known for having "strong clusters" of businesses that specialize in the same field. So, the best way to break into the market is to fit into these clusters.
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3. Florida
Florida is known for having one of the highest real GDP growth rates in the country at over 4%. While Florida has a lot of old population, the labor force is doing great. Florida's working-age population, between ages 16 and 64, is growing faster than in other states. Therefore, finding employees for your business in Florida will not be a problem. Of course, the state also boasts low tax rates and no personal income tax as well as no corporate income tax on subchapter S-corporations and Limited Partnerships.
4. Idaho
Idaho is a business-friendly state which also has low tax rates and a strong economy. The state also has growth potential and boasts great infrastructure. There are seasonal regulations when it comes to launching a business and the state GDP has also grown at an annual rate of 1.8% each year. There's a lot of scope for opening a business as the state has a great network of entrepreneurs who are ready to support each other. The cost of registering for a business in Idaho is $100 to file the Certificate of Organization online and $120 to file by mail.
5. Nevada
Nevada is known for having one of the most favorable tax laws in the country. The state has no personal income tax and also no corporate tax. According to Dealroom.co data, in 2023, Las Vegas alone hosted 625 startups. Nevada also has really limited regulations and annual fees. It is also an extremely business-friendly legal state. On top of everything, the state also has great infrastructure and is known for protecting the privacy of business owners. Nevada's lack of state income tax is because tourists pay most of the state's taxes. Therefore, it's no doubt a great place to launch a business.
6. Arizona
Arizona is known for being one of the top states to start a business mostly because of the low rates. The individual income tax rate in the state is 2.5%. The state is also known for not charging on Social Security benefits. Arizona boasts a really low cost of living and has limited and reasonable regulations. The workforce in Arizona is highly educated, so you will easily find a balanced team to work on the goal of your business.
7. Colorado
Colorado is known for having favorable tax laws and one of the lowest income tax rates in the country, which is 4.40%. The government is also welcoming new industries and new businesses. The state is also now one of the most educated states in the country which is always a piece of good news when looking to start a business in the state. Colorado offers a great quality of life with a diverse environment. Colorado is also known for having many venture capital firms.
8. Texas
Low tax burden is one of the leading reasons why Texas is considered a good place to start a business. The state is also known for its business-friendly climate. Access to capital is another reason why people look at Texas when planning to start a new business in the US. Texas also offers unique and diverse business options. The state boasts an educated workforce. Apart from this, Texas is known for giving easy access to global markets.
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9. North Carolina
The state has a really low corporate income tax rate and is known for having fewer regulations. The corporate tax rate is around 2.5% which is on the lower side. The cost of setting up a business in North Carolina is also pretty low and reasonable. The talent pool in the state is also diverse which means finding a good workforce won't be a task. North Carolina is also known for having great infrastructure which is always great for new business owners.
10. Tennessee
Tennessee is also ranked as one of the best states in the country to open a business in the year 2024. The state is known for its easy and pro-business climate with low regulations and great infrastructure. Tennessee is known for having low corporate tax rates and does not have any individual income tax. The state is well known for its transportation network—one of the best in the country. The state has seen an influx of people from other places because of the great business climate.
