From favorable tax climates to physically powerful infrastructure, a professional workforce and strategic locations, the states most conducive to business expansion have created environments that marketers and established businesses find irresistible. As businesses continue to adapt and adapt in a globalized world, it is necessary to understand which US states offer the most promising landscapes for expansion and success.
Recently, business consulting firm Venture Smarter analyzed data from the Bureau of Labor Statistics (BLS) to identify the expansion rate of businesses in each state based on the number of institutions in December 2021 compared to December 2022. Their findings are revealing.
States along what’s known as the Sun Belt in the United States occupy some of the most sensible spots. For example, the first place on the list is occupied by Georgia, which experienced an expansion rate of 13. 5%. In December 2022, there were 397,515 commercial establishments, compared to 350,189 in December 2021. One of the many points that favor business expansion in Georgia is that the corporate source of income tax is set at a moderate rate of 5. 75%. In addition, Georgia also provides employment tax credits to reduce the corporate tax payable to eligible businesses.
The second state for business expansion is Virginia, which recorded an impressive 10. 5% expansion rate. In Virginia, the number of businesses increased from 305,345 in December 2021 to 337,394 a year later. The state offers many incentive programs for small businesses, adding the Virginia Enterprise Zone, which has many benefits, from tax exemptions for rehabilitated structures to tax credits for job creation. Virginia has benefited for some time from the so-called Dulles Technology Corridor, which is a business group made up of several defense and generation companies.
Arizona is in third place, with an expansion rate of 10. 4%, only Virginia. In December 2021, when there were 191,756 business establishments, this figure surpassed the 200,000 mark, reaching 211,683 in December 2022. Arizona, apparently, has the 14th highest tax rate on the lowest source of corporate income in the United States, with 4. 9%.
Montana and Vermont tied for fourth place, with both states experiencing a 10. 2% year-over-year trade expansion rate. Some points that help business expansion rates in Montana are due to the fact that starting an LLC in Montana requires an initial filing fee of only $35, which is particularly lower than other states like California, which charges around $500. Meanwhile, in Vermont, citizens can take advantage of several business incentives, such as flexible profit distribution, which allows businesses registered as LLCs to decide other tactics for distributing their profits.
Michigan ranks fifth among the most productive states for business expansion, recording a business expansion rate of 9. 8%. The state saw its institutions grow from 275,636 in December 2021 to 302,624 in December 2022, an accumulation of more than 25,000 corporations in absolute value. Michigan saw a 24% increase in small business profits between January 2020 and January 2022, which is particularly higher than the national average rate of 6. 9%. The state has come a long way from the depths of the Great Recession.
South Carolina ranks sixth, with the Palmetto State overseeing the expansion in the number of advertising institutions from 155,945 in December 2021 to 170,968 in December 2022, resulting in a business expansion rate of 9. 6%. South Carolina offers incentives for new businesses registered as a corporation. such as no local source of income taxes, no state asset tax, and no stock tax. These three characteristics make South Carolina particularly conducive to entrepreneurs.
The seventh-best state for business expansion is North Carolina, which is experiencing a 9. 2% business expansion rate, with the number of business institutions expanding from 325,058 in December 2021 to 354,823 in December 2022. It’s no coincidence that North Carolina has one of the lowest corporate income tax source in the country, at just 2. 5%.
Colorado and Hawaii are tied for eighth place. These states experienced a year-on-year trade expansion rate of 9. 1% from December 2021 to December 2022. Idaho largely trails those two in ninth place. In Idaho, the number of commercial institutions increased from 82,118 in December 2021 to 89,454 in December 2022, an expansion rate of 8. 9%. Idaho entrepreneurs can enjoy a variety of business tax credits, including the Small Employer Capital Investment Credit, which provides 3. 75% small business tax credits on new appliances purchased in the state. And finally, there’s Utah’s No. 10. The state saw an 8. 4% business expansion rate: in December 2021, Utah had business institutions, before expanding by 8. 4%, reaching 137,277 business institutions in December 2022. Utah has a low corporate tax rate of 4. 85%, as well as an LLC files a payment of $54 with an additional payment of $18 each year.
Meanwhile, on the opposite end of the spectrum, Washington state has the worst business growth rate at -16. 8%. The state had 284,440 advertising institutions in December 2021, up from 47,644 in December 2022. In fact, Washington was the only state to revel. in a sharp decline in institutions. However, it is vital to note that no matter what state you are in, it is imperative to study the rates you want to pay as they can vary greatly from state to state. Not to mention, there are plenty of incentives to take advantage of it. If you’re eligible, it can make the process of starting a business easier and less expensive, Venture Smarter said.
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