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June 15, 2023
While there are numerous factors contributing to your startup’s success, the location you choose for your new company plays a major role, especially when it comes to the costs of launching a new business. Your business’s location can affect how much you’ll pay toward rent, utilities and taxes, or your ability to find, hire — and ultimately retain — quality talent.
That’s the idea behind the latest ranking of the least (and most) expensive U.S. states for starting a business from online small business advisory company, Simplify LLC, which compared the country’s 50 states and ranked them based on nine business cost-related factors — basic business costs, labor costs and worker availability, cost of space and utilities, and healthy business environment.
Nevada is the cheapest state in the U.S. to start a business, without any corporate income tax, though it does collect a gross receipts tax of up to 0.3% from businesses with annual revenue exceeding $4,000,000. Plus, it boasts to be the third most commercial space-available state in the country.
Further, Nevada has the fourth-best business survival rate, which is about twice as many new businesses formed than failed in the state.
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Colorado and Arkansas came in just behind the Silver State, aka Nevada. Both these states boasted of receiving ample small business loans. Arkansas small businesses received nearly $43 million in loans per 100,000 residents, the sixth-highest of any state. Colorado ranked eighth with $41.2 million in small business loans per 100,000 residents.
In addition, these two states have some of the lowest corporate tax rates — with Arkansas imposing a rate of 3.3% and Colorado at 4.4%. Additionally, these states have the lowest LLC filing fees — Arkansas state fee for starting an LLC being just $45 and Colorado’s $50, the ranking notes.
Read the complete 2023 Most and Least Expensive States to Start a Business Report from SimplifyLLC.
This material has been prepared for informational purposes only. Escalon and its affiliates are not providing tax, legal or accounting advice in this article. If you would like to engage with Escalon, please contact us here.
Kanika is an enthusiastic content writer who craves to push the boundaries and explore uncharted territories. With her exceptional writing skills and in-depth knowledge of business-to-business dynamics, she creates compelling narratives that help businesses achieve tangible ROI. When not hunched over the keyboard, you can find her sweating it out in the gym, or indulging in a marathon of adorable movies with her young son.
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