New York ranks as the most expensive state for entrepreneurs, with high commercial lease costs, weekly wages, and LLC registration costs. » Financial

New York ranks as the most expensive state for entrepreneurs, with high commercial lease costs, weekly wages, and LLC registration costs.  » Financial

Business consulting company Adventure is smarter The researchers analyzed eight metrics that can affect the cost of starting and running a business in each state. This included each state’s corporate tax rate, average LLC filing fees, average commercial lease costs, and minimum hourly wages.

These metrics were collected for all 50 states, with each scored out of 100 to reveal the most and least expensive states to be an entrepreneur.

Washington ranks second, and Massachusetts ranks third as the most expensive state for entrepreneurs.

The research revealed this New York It is the most expensive state in America to start a business, with a score of 79.07 out of 100. The state offers the highest annual commercial lease cost per square foot at $38.92, and the highest average weekly wage at $2,015. It costs $200 on average to file an LLC in New York, which is the fourth most expensive in the country next to Alabama.

The state also has the fourth-highest average sales tax rate at 4.5% and the fourth-highest minimum hourly wage at $14.20. The average corporate tax rate in the Empire State is 7.1% (14th highest), and the average annual LLC fee is $25 (17th highest). New York’s workforce also makes up 49.7% of its population.

Washington It ranks as the second most expensive state to start a business, scoring 76.54 out of 100. The Evergreen State has the highest minimum hourly wage in America at $15.74 and the fifth highest LLC filing cost at $190. Washington also has the eighth-highest sales tax rate next to Arizona, at 2.8%.

Massachusetts It received a score of 71.29 out of 100 and is ranked third in terms of the cost of starting a business. The state has the highest annual renewal LLC filing fee of $500, the third-highest hourly minimum wage at $15, and the ninth-highest corporate tax rate at 8%.

California It scores 69.79 out of 100 and ranks fourth on the list of most expensive states to own and operate a business. Silicon Valley Home has the second highest minimum hourly wage at $15.50, the second highest average commercial rental costs per square foot ($32.99), and the fifth highest corporate tax rate at 8.8%. However, the state has the seventh lowest LLC filing costs on average, at just $70.

He scored 66.83 out of 100 and ranked fifth illinois. The state has the third-highest average corporate tax rate at 9.5%, the ninth-highest LLC filing cost at $150, and the tenth-highest LLC annual fee at $75.

New Jersey It ranks sixth on the list, scoring 64.36 out of 100. The state has the fourth-highest corporate tax rate at 9% and the seventh-highest average commercial rent at $22.96 per square foot.

Connecticut It ranks seventh, with a score of 64.35 out of 100. The state is tied with New Jersey for the fourth-highest tax rate at 9% and has the sixth-highest hourly minimum wage at $14. Minnesota It scored 60.08 out of 100 and is the eighth most expensive state for entrepreneurs. The state has the second-highest corporate tax rate at 9.8%, as well as the tenth-highest average cost of filing for LLCs at $135.

Texas It scored 59.74 out of 100 and is the ninth most expensive state for entrepreneurs. The state ties with Tennessee for the highest initial filing costs for an LLC at $300. Unlike many other states, Texas does not require business owners to pay an LLC registration fee each year to keep the company incorporated.

Maryland Rounding out the top 10 with a score of 58.38 out of 100. The state has the eighth-highest corporate tax rate at 8.3% and the ninth-highest average weekly wage at $1,541.

Mississippi It scores 11.87 out of 100 and is the least expensive state for entrepreneurs in America. The state has the fourth-lowest corporate tax rate at 4.0% and is one of 20 states that sets its minimum wage at $7.25 per hour, the lowest nationally. Filing an LLC in Mississippi costs $50 on average, and the state does not require business owners to pay an annual renewal filing fee.

Spokesman Adventure is smarter Comment on the results:

“Each state has its own complex regulatory and economic environment, which contributes to differences in business costs. New York is the most expensive state for entrepreneurs, due in part to its high cost of living as well as its highly competitive business environment.

“In fact, more than 27,000 job applications were filed here in November 2023 alone, according to the U.S. Census Bureau, reflecting an 11.4% increase from the previous year.

“On the other hand, Mississippi’s relatively low startup costs may be an intentional move to stimulate entrepreneurship, create more jobs and funnel more money into the local economy, since it has the highest poverty rate of any state.

“This research aims to provide valuable insights into the business climate in different states, and provide new entrepreneurs with the information they need to make informed decisions on their entrepreneurial journey. By understanding the unique characteristics and challenges of each state, aspiring entrepreneurs can navigate the complexities of different markets and improve their chances of success.” .

Rank state Average corporate tax rate Average sales tax rate Minimum wage ($) Average weekly wage ($) Average cost of filing an LLC ($) Annual cost of an LLC ($) Average annual commercial lease cost per square foot ($) Labor force as a percentage of the population Score /100
1. New York 7.1% 4.5% 14.20 2,015 200 25 38.92 49.7% 79.07
2. Washington 0.0% 2.8% 15.74 1,721 190 60 21.13 52.2% 76.54
3. Massachusetts 8.0% 0.0% 15.00 1,917 275 500 25.43 53.2% 71.29
4. California 8.8% 1.6% 15.50 1,735 70 10 32.99 49.7% 69.79
5. illinois 9.5% 2.6% 13.00 1,567 150 75 20.02 51.2% 66.83
6. New Jersey 9.0% 0.0% 14.13 1,699 125 78 22.96 52.6% 64.36
7. Connecticut 9.0% 0.0% 14.00 1,817 120 80 21.41 52.3% 64.35
8. Minnesota 9.8% 0.6% 10.59 1,461 135 0 18.34 54.5% 60.08
9. Texas 0.0% 2.0% 7.25 1,480 300 0 21.51 50.4% 59.74
10. Maryland 8.3% 0.0% 13.25 1,541 100 300 20.54 51.9% 58.38
11. Arizona 7.0% 2.8% 13.85 1,330 50 0 20.23 50.4% 58.30
12. Colorado 4.6% 4.9% 13.65 1,559 50 10 21.49 55.7% 57.11
13. Nevada 0.0% 1.4% 10.50 1,246 75 150 21.74 50.4% 55.98
14. Missouri 6.3% 4.1% 12.00 1,224 105 0 15.43 50.7% 52.98
15. South Dakota 0.0% 1.9% 10.80 1,084 158 50 14.79 53.2% 52.63
16. Delaware 8.7% 0.0% 11.75 1,431 90 0 16.09 49.9% 51.53
17. Ohio 0.0% 1.5% 10.10 1,265 99 0 13.55 49.5% 51.28
18. Pennsylvania 10.0% 0.3% 7.25 1,408 125 0 18.41 50.1% 50.27
19. Oregon 7.1% 0.0% 13.50 1,339 100 100 18.77 50.6% 49.40
20. Florida 5.5% 1.0% 11.00 1,330 125 139 29.55 50.1% 48.48
21. Virginia 6.0% 0.5% 12.00 1,477 100 50 20.70 53.1% 48.35
22. rhode island 7.0% 0.0% 13.00 1,334 150 50 17.21 52.3% 48.33
23. New Hampshire 8.5% 0.0% 7.25 1,462 100 100 18.54 54.3% 47.02
24. North Carolina 6.9% 2.2% 7.25 1,348 125 200 20.92 49.2% 46.19
25. Vermont 7.3% 0.2% 13.18 1,188 125 35 14.57 53.9% 46.05
26. Alabama 6.5% 5.2% 7.25 1,164 200 0 15.33 45.5% 45.87
27. Alaska 5.2% 1.8% 10.85 1,301 250 50 23.53 48.8% 45.03
28. Tennessee 6.5% 2.6% 7.25 1,264 300 300 18.95 48.0% 44.86
29. Georgia 6.0% 3.4% 7.25 1,376 100 50 19.94 48.9% 43.50
30. who 6.2% 0.0% 13.80 1,188 175 85 16.56 49.5% 43.36
31. Wyoming 0.0% 1.2% 7.25 1,145 100 50 14.17 51.4% 43.02
32. New Mexico 6.2% 2.7% 12.00 1,105 50 0 16.10 45.7% 42.64
33. Hawaii 5.4% 0.4% 12.00 1,218 50 15 32.93 46.9% 40.94
34. nebraska 6.7% 1.4% 10.50 1,165 100 13 14.55 53.9% 40.84
35. yeah 9.0% 0.9% 7.25 1,176 50 30 14.44 54.4% 40.62
36. Louisiana 6.0% 5.1% 7.25 1,150 100 30 16.84 45.5% 39.71
37. wisconsin 7.9% 0.4% 7.25 1,211 131 25 15.93 53.3% 39.25
38. Oklahoma 6.0% 4.5% 7.25 1,109 100 25 14.85 48.5% 37.55
39. Kansas 5.5% 2.2% 7.25 1,155 165 55 17.42 51.8% 36.64
40. Indiana 8.5% 0.0% 7.25 1,203 90 32 14.86 50.1% 36.00
41. Idaho 7.6% 0.0% 7.25 1,084 60 0 17.07 50.0% 35.70
42. Montana 6.8% 0.0% 9.95 1,079 35 20 18.48 51.5% 34.40
43. Utah 5.0% 1.1% 7.25 1,245 54 18 21.82 53.6% 33.23
44. Michigan 6.0% 0.0% 10.10 1,308 50 25 15.42 49.7% 33.16
45. South Carolina 5.0% 1.4% 7.25 1,139 135 0 19.80 46.6% 32.42
46. Arkansas 3.8% 3.0% 11.00 1,127 48 0 18.44 45.7% 32.40
47. West Virginia 7.8% 0.5% 8.75 1,062 101 25 12.70 44.5% 29.50
48. North Dakota 3.5% 2.0% 7.25 1,216 135 50 15.62 53.6% 25.83
49. Kentucky 5.0% 0.0% 7.25 1,138 40 15 17.24 45.3% 18.89
50. Mississippi 4.0% 0.1% 7.25 944 50 0 15.73 42.0% 11.87

sources:

methodology:

Data was collected for eight factors that can affect the cost of setting up and running a business in each US state. Each factor was then ranked using a 10-point scale, where the 10-point scales represent a relative index, with each state ranked based on its position relative to the variable scale in other states. Each state was given a score out of 100 on this basis, with higher numbers representing more expensive states for entrepreneurs.

The following factors are included for each state:

  • Average cost of filing an LLC
  • Annual LLC filing renewal fees
  • Average corporate tax rate
  • Average sales tax rate
  • Lowest wage
  • Average weekly wage
  • Average annual commercial rent per square foot
  • Labor force as a percentage of the population
    (Tags for translation) Business

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