The Best State for Business: Texas vs. Competing Markets

November 07, 2016 by Midlothian Economic Development


The CEOs of the nation have spoken. With a promising economy, highly rated quality of life, and positive business-friendly climate, Texas is time and time again denoted as a great place to do business.

For the 12th consecutive year, Texas holds the title of best state for business by Chief Executive Magazine. This ranking alone stands out significantly compared to competitor markets like California, Illinois, and New York that all rank in the bottom three spots. There are many factors that play into the definition of best state for business, which are worth looking into.

Surveying 513 CEOs across the nation, Chief Executive identifies what states enjoy the most business-friendly tax and regulatory regimes, quality of workforce, and quality of living environment.

Tackling the Irritations of Regulations

As a progressive city in Texas, we prioritize a business-friendly environment for tax and regulations. We understand the pitfalls businesses experience elsewhere and work toward exemplifying ease and support for incoming and existing businesses. For example, the Corporate Income Tax Rate in Texas is zero compared to California’s 8.84%, which according to Financial Web, can cause the corporation to choose to relocate the company to a state or locality where corporate income taxes are not assessed at such a high rate.

In California, it’s a painful process to jump over regulatory hurdles. If you can ensure all resources are available to produce products, but can’t turn on a plant because of tight regulations, you just have a pile of machines sitting on dirt,” said Ed McKenna, CEO at the Applied LNG plant in Midlothian, Texas.

At this level, the amount a city invests into bringing in new business can change the climate. Also paired with the lowest Sales Tax Rate compared to competing markets, Texas outperforms California, Illinois, and New York as shown in our infographic comparison chart of each state.

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Come for the Quantity, Stay for the Quality

In addition, Texas ranked No. 4 in workforce quality and manufacturing, which holds true the state’s commitment to growing a dynamic workforce and advanced manufacturing sector. The Lone Star state stands strong against sought after markets as it continues to develop a skilled labor force unique to the manufacturing industry. With a vast number of available workforce, Texas boasts the No. 2 state for the manufacturing employment with 844,300 workers as of the second quarter of 2016, according to Bureau of Labor Statistics

Why Texas Is the Best State for Business

Whether a small business or corporate giant is looking to relocate their business, quality of living is a major factor that plays into the decisions once all the boxes are checked. While businesses seem to flock to cities in California, Illinois, and New York for the “location” factor, they suffer from some of the highest costs of living in the country. In contrast, business owners looking to relocate within a thriving, affordable environment are looking elsewhere. CNCB identified The Top 20 Metros to Start a Business in America, of which 6 out of 20 were in Texas. This promising statistics showcases that Texas is the best state for business and offers an abundance of opportunity.

For more statistics and a visual breakdown of the best state for business, take a look at our infographic that compares Texas with other competing states on a tax and regulatory basis.

 Discover the Texas Difference  Download our Infographic


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