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Running your own business is always a challenge. It could be a little easier in the Lone Star State.
Texas is the cheapest state in the country to run a business, according to new research from enterprise cloud software platform Approve.com. The study weighed factors such as the average annual salary, the highest corporate tax rate, and the average prices of utilities like electricity and the Internet. The study included the District of Columbia, but omitted Alaska and Hawaii due to “data not available.”
Here are the five cheapest states in the country to run a business, according to the study:
- Texas
- Oklahoma
- Kentucky
- Nevada
- Georgia
Texas tops the list thanks to its tax policies and utility costs. The state taxes businesses with annual revenues in excess of $ 1,180,000 at a rate of 0.375%, but its corporate tax laws are considered the most business-friendly in the country.
Perhaps that’s why Tesla co-founder and CEO Elon Musk announced last week that his company is moving its headquarters from Palo Alto, Calif., To Austin. Tesla will join Oracle, Hewlett Packard Enterprise, Charles Schwab and many other companies that recently moved their headquarters to Texas.
Of course, it’s not always all about the money. Some of those same companies have come under fire for moving their operations into the state, following several controversial policy decisions by Texas lawmakers – including the state’s new restrictive voting laws, a law effectively banning abortions. and the Covid vaccine bans and mask warrants.
The study also ranked the top five most expensive states in the country for running a business:
- California
- New Jersey
- Vermont
- District of Colombia
- Iowa
California workers have the ninth highest average annual salary in the country, at $ 47,290 per year. The state also easily has the highest electricity prices in the country, averaging 17.7 cents per kilowatt hour.
A February study by UC Berkeley Haas School of Business found that customers of Pacific Gas and Electric Company (PG&E), California’s largest utility, pay nearly 80% more per kilowatt hour than the national average. , due to both the costs associated with forest fires and the fixed costs associated with the state’s energy efficiency programs.
Vermont is sort of an outlier in this ranking: Green Mountain state is one of the least populated in the United States, which is generally correlated with lower start-up costs. However, the Approve.com study noted that Vermont has the second highest electricity costs in the country – and, perhaps most notably, the ninth highest corporate tax rate, at 8.5. %.
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