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Which states are best for incorporating a business? Many entrepreneurs are asking themselves this question as they work on getting their small businesses ready to launch.
In previous years, we might have defaulted to answering with the typical lineup of corporate darlings. However, nearly two years into the COVID-19 pandemic have revealed several emerging states that are establishing themselves as startup hubs. Here are five emerging states you may find yourself incorporating your business in and some of their outstanding small business benefits.
Florida has a reputation for bringing plenty of business benefits to the table.
One of the biggest benefits to incorporating in Florida is a favorable tax climate. Florida does not have personal income taxes. The state’s corporate income tax rate has been noticeably decreasing. Now, the corporate income tax rate is 4.458% for all dates after Jan. 1, 2019 — a decline from Florida’s 5.5% previous corporate income tax rate.
Thumbtack’s 10th Annual Small Business Friendliness Survey results rank Florida in fourth place. The state receives an “A” for overall small business friendliness. Florida receives strong rankings in its support of women-owned and BIPOC-owned businesses. Thumbtack’s survey ranks Florida in sixth place for women-owned businesses and second place with BIPOC-owned businesses.
The combination of favorable taxes, small business friendliness, and a warm climate is also increasing the state’s rate of new entrepreneurs. Within any given month, 0.42% of non-business owner adults are choosing to start a business in Florida.
Each year, WalletHub releases its report on the best and worst states to start a business. The state of Georgia ranks second in 2021 and trails hot on the heels of Florida in Thumbtack’s small business friendliness survey in fifth place.
What is it about Georgia that is attracting so many entrepreneurs? The state of Georgia will tell you that companies in Georgia do more than grow. They are changing the landscape of the world we live in. Georgia leads with talent. The state has the No. 1 industrial engineering program and No. 2 biomedical engineering program in the United States.
Like Florida, starting a business in Georgia also means enjoying tax incentives both familiar and unique to entrepreneurs. The state has a low corporate tax rate. Georgia also offers business owners a Job Tax Credit. For every new job a Georgia-owned and operated business creates, the Job Tax Credit gives the business a credit ranging from $1,250 to $4,000 per year for five years.
Idaho, ranking in fifth place on WalletHub’s survey, wants entrepreneurs to know that successful businesses in Idaho truly contribute to the state’s economy.
If you’re starting a business in Idaho, you’ll receive access to a wide variety of financial benefits. Many tax credits are exclusive to Idaho. One key incentive is the Idaho Tax Reimbursement Incentive (TRI). The TRI offers a tax credit of up to 30% for up to 15 years on new state tax revenues generated by companies expanding in Idaho and adding new jobs. Additional tax credits include property tax exemption, workforce development reimbursements, and a 3% investment tax credit on new depreciable personal property used in Idaho including machinery and equipment.
What about grant resources? Entrepreneurs that start a business in Idaho will find a wide range of grants available to small businesses. Hundreds of grants are awarded to Idaho startups each year. Review and see which ones your business may be eligible to receive.
Montana is a bit of a dark horse when it comes to the best states to incorporate a small business. The state’s greatest asset is the Montana Department of Commerce.
The Montana Department of Commerce works alongside Montana businesses to ensure they succeed and the state, and its economy, succeeds alongside the business. Business creation is just the beginning for companies that incorporate in Montana. From there, the Montana Department of Commerce works to guide small businesses as they expand, hire and retain talent, and find financial assistance like grants and loans. There’s even Montana Housing to ensure that all entrepreneurs have a home of their own that they can afford.
As the business grows and becomes stronger, so does the economic base of Montana and its citizens.
Everything is bigger in Texas, especially small businesses! Texas raced its way up to the No. 1 spot on WalletHub’s best states for business survey. The state also received high rankings for small business friendliness from Thumbtack.
Like Florida, Texas is trailblazing a path forward for entrepreneurship. Businesses that incorporate in Texas enjoy a favorable tax and business climate. Texas prides itself on offering what is described as the best business ecosystem in the United States — and the state is more than happy to help you start a business in Texas, too.
Many other factors may be considered when choosing a location to incorporate your small business. You might find that a different state meets your needs, or one of the emerging ones mentioned does!