Texas ranks as the top state in the country for starting a new business according to a new survey published in Q1, 2024. The Lone Star State ranks # 1 primarily due to a strong influx of educated workers and no corporate income tax.Texas is one of the few states that does not collect any type of income tax, although it does levy a gross receipts tax. Florida ranked as the # 2 state for business owners in 2024, according to the study, which cited its strong job creation and educated worker mobility. For 2023, total nonfarm employment in Florida grew by 2.5%, or about 240,600 jobs. Rounding out the top three states for business owners is Wyoming, which has no corporate taxes and saw the country’s strongest business growth in the year ending November 2023, the study found.
On the other end of the spectrum, Louisiana ranked as the worst state to start a business in 2024 due to its lack of business growth, high regional inflation, lower consumer spending growth and limited mobility for educated workers. About 31,000 educated workers moved into the state in 2023 and another 47,600 moved out, meaning the state lost 16,000 educated workers. Washington, D.C., trailed Louisiana with “lackluster scores” across the board, the study said. The capital city has an especially high maximum corporate tax rate of 8.25% and low consumer spending growth. California came in as the third-worst state to start a business. Although the Golden State has a high job creation rate and has seen less inflation since 2021 than many other parts of the country, it is experiencing an exodus of educated workers. Almost 150,000 more workers left the state than moved there in 2023. On top of that, California has a high corporate tax rate of 8.84%.
