New research has revealed the best states for business growth, with Georgia taking the top spot.
Business consulting firm Venture Smarter analyzed data from the U.S Bureau of Labor Statistics to discover the business growth rate in each state based on the number of establishments in December 2021 compared to December 2022.
Top of the list is Georgia, with a business growth rate of 13.50%. In December 2022, there were 397,515 business establishments compared to 350,189 in December 2021. Corporate income tax is set at a reasonable rate of 5.75% in Georgia, with the state also offering job tax credit to reduce corporate tax liability for eligible businesses.
In second place is Virginia, which witnessed a business growth rate of 10.50%; the number of businesses increased from 305,345 in December 2021 to 337,394 one year later. The state offers many small business incentive programs, including the Virginia Enterprise Zone, which has many benefits, from tax exemption for rehabilitated structures to tax credits for creating employment.
Arizona is in third place with a business growth rate of 10.40% after seeing the number of business establishments rise from 191,756 in December 2021 to 211,683 the following year. The state has the 14th lowest corporate income tax rate in America at 4.9%.
Montana and Vermont are in joint fourth place, with both states seeing a business growth rate of 10.20%; Starting an LLC in Montana requires an initial filing fee of just $35, which is significantly lower than in other states, such as California, with a cost of $500. As well as this, Vermont citizens can take advantage of several business incentives, such as flexible profit distribution, which allows companies registered as LLCs to choose various ways to distribute profits.
In fifth place is Michigan, with a business growth rate of 9.80%; the state saw establishments increase from 275,636 in December 2021 to 302,624 in December 2022. Michigan experienced a small business revenue increase of 24% between January 2020 and January 2022, significantly higher than the 6.9% average rate across the nation.
South Carolina is in sixth place; the state witnessed the number of establishments grow from 155,945 in December 2021 to 170,968 in December 2022, resulting in a business growth rate of 9.60%. South Carolina offers incentives for new businesses registered as a corporation, such as no local income tax, no state property tax, and no inventory tax.
Ranking in seventh place is North Carolina, with a business growth rate of 9.20% after seeing the number of establishments rise from 325,058 in December 2021 to 354,823 12 months later. The state has one of the country's lowest corporate income tax rates at just 2.5%.
Colorado and Hawaii are in joint eighth place. These states both experienced business growth rate of 9.10%. Businesses starting as an LLC require a low filing fee in both states at $50, with the additional cost being $10 every year in Colorado and $20 in Hawaii.
Following closely behind is Idaho in ninth place – the state saw the number of establishments rise from 82,118 in December 2021 to 89,454 in December 2022, equating to a growth rate of 8.90%. A range of business tax credits are available to Idaho entrepreneurs, including the small employer capital investment credit, which offers a tax credit of 3.75% to small businesses on new equipment purchased in the state.
Last on the list is Utah in tenth place with a business growth rate of 8.40%; in December 2022, the state had 137,277 establishments compared to 126,644 in December 2021. Utah has a low corporate income tax rate of 4.85%, as well as an LLC filing fee of $54 with an additional charge of $18 every year.
On the opposite end of the scale, Washington has the worst business growth rate of -16.80%. The state had 284,440 establishments in December 2022, which decreased by 47,644 in December 2022; Washington was the only state to witness a decrease of establishments.
A spokesperson from Venture Smarter has commented: "With the key benefits of starting a business in the states mentioned, it will be fascinating to witness the business growth rate over time and see how many more entrepreneurs thrive with the available support."
"However, regardless of your state, it's vital to research the fees you will be expected to pay as they can vary significantly across states – not to mention, there are many incentives to take advantage of if you are eligible that can make the process of starting a business smoother and cheaper."
This information was provided by Venture Smarter, a team of expert consultants with years of experience who can offer advice and help accelerate your business growth.
