Top 10 Most Expensive States To Start a Business
Are you thinking of starting your own business? If you have what you believe to be a million dollar idea, you’re probably getting excited at the prospect of running your own company and begin earning money. But, there is the issue of startup costs, which vary from state to state.
The research team at Zibtek looked at nine key factors, including:
Income tax
Corporate tax
Property tax
Average monthly electric bill
Sales tax
LLC business filing fees
Gross domestic product (GDP) per capita
Personal consumption expenditures (PCE) per capita
Internet crime losses
Based on those factors, here are the 10 most expensive states to start a business.
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California
The Golden State has many factors that contribute to it being at the top of the list. One being its high income tax rate of 13.3%. Another aspect that made California an expensive state to start a business in is its internet crime losses, which were the second highest on the list at $104 million.
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New Jersey
New Jersey is second on the list, proving it’s hard to start a business on either coast. New Jersey was third highest when it came to internet crime losses.
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Massachusetts
Massachusetts ranks high because it has the highest LLC business filing fee at $520. It also is in the top five highest states when it comes to monthly electricity bills, so it will be costly to literally keep the lights on. Massachusetts also has the second highest GDP per capita.
New York
New York has the highest GDP per capita in the country. The state has the third highest income tax rate at 10.9%. This makes it a pricey state to earn a living as a business owner.
Illinois
The corporate tax rate in Illinois is the second highest nationwide at 9.5%. The property tax rate is also the second highest in the country, so you’ll be paying a good chunk of change on taxes alone for your Illinois business.
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Vermont
Vermont has the highest property tax rate, so if you own your business space, you’re going to pay a lot in taxes. This also might mean paying more for a business space lease, as property owners are trying to make as much as they can to cover that tax rate.
Connecticut
Though Connecticut doesn’t rank remarkably high on any specific factor, it is worth noting that it has the third highest personal consumption expenditures (PCE) per capita, so it’s almost expected you’re going to pay more than the average just to live in the state, let alone operate a business there. The average monthly electric bill is also the sixth highest in the country, which means you can expect some costly utilities.
Minnesota
When starting a business in Minnesota, you’ll be slapped with the highest corporate tax rate in the country at 9.8%. The income tax rate is the sixth highest at 9.85%. These combined make tax season pricey for business owners in the land of 10,000 lakes.
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Hawaii
Hawaii had the highest electricity bills on the list and the second highest income tax rate at 11%. You can expect high internet crime losses as well, as Hawaii is fourth on that list overall.
Pennsylvania
Pennsylvania has the ninth highest corporate tax rate in the country and the sixth highest property tax rate. However, there is some good news, as the income tax rate is one of the lowest in the country.
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This article originally appeared on GOBankingRates.com: Top 10 Most Expensive States To Start a Business
