The Top 5 US States for Business Development

Some U.S. states have attracted business growth due to their favorable tax climates, strong infrastructure, highly skilled workforces, and advantageous locations. These states serve the needs of both start-ups and well-established businesses. Finding the states that offer the most favorable conditions for growth and success is crucial in this constantly changing and adapting landscape.

Some U.S. states have attracted business growth due to their favorable tax climates, strong infrastructure, highly skilled workforces, and advantageous locations. These states serve the needs of both start-ups and well-established businesses. Finding the states that offer the most favorable conditions for growth and success is crucial in this constantly changing and adapting landscape.

The Top 5 States in the US for Business Growth

Business consulting firm Venture Smarter recently examined data from the Bureau of Labor Statistics (BLS) to determine the rates of business growth in each state. This analysis measured the increase in establishments over the period of December 2022 to December 2021. The outcomes are instructive and highlight some noteworthy trends:

• The state of Georgia
• The Commonwealth of Virginia
• Arizona
• Vermont and Montana are tied.
• Michigan

Venture Smarter highlights an important point:

Regardless of your state, careful investigation into the expected costs is necessary. There are significant differences in these charges between states. Moreover, it is significant that a multitude of incentives are available to qualified parties, allowing for a more efficient and economical launch of the enterprise.

Top States in the US for Business Growth

The state of Georgia

Georgia has secured the top spot on the roster with an impressive 13.5% business growth rate. There has been a noticeable increase in business establishments, which went from 350,189 in December 2021 to a remarkable 397,515 by December 2022. Georgia’s prudent corporate income tax, set at a fair 5.75%, is a major contributor to the state’s thriving business environment. Additionally, the state offers a job tax credit, which gives qualified companies a way to reduce their corporate tax obligations.

The Commonwealth of Virginia

Virginia comes in second for best business growth, with an impressive increase of 10.5%. Between December 2021 and the same month in 2022, Virginia’s business entities experienced a significant increase, rising from 305,345 to 337,394. Virginia sets itself apart with a variety of small business incentive programs, the most notable of which is the Virginia Enterprise Zone. This program offers a variety of benefits, including tax credits for creating jobs and tax exemptions for structures that have been renovated.

Virginia, a state that has benefited from the highly regarded Dulles Technology Corridor for a considerable amount of time, is a business hub for defense and technology companies. This mutually beneficial ecosystem also adds to the state’s ongoing attraction to companies looking for expansion and innovation.

Arizona

Arizona is in third place, slightly behind Virginia, with a strong business growth rate of 10.4%. The growth is demonstrated by the fact this, by December 2022, there were 211,683 business establishments, surpassing the 200,000 threshold, from 191,756 in December 2021. With a competitive corporate income tax rate of 4.9%, Arizona boasts the 14th lowest corporate income tax rate in the US. This financial benefit gives the state a unique charm that makes it more appealing to companies looking for favorable economic environments.

Vermont and Montana are tied

Vermont and Montana, with respective rates of 10.2% year-over-year business growth, tie for fourth position. One reason Montana’s business environment is so buoyant is that the state’s small initial LLC filing fee of $35 is one of the reasons. This amount highlights Montana’s cost-effective appeal for business initiation in sharp contrast to other states, such as California, where the average cost is approximately $500.

Simultaneously, Vermont highlights its business-friendly climate by providing a range of business incentives to its citizens. The most notable of these is the profit distribution flexibility, which allows LLC-registered businesses to choose from a variety of profit allocation strategies. This accommodative stance strengthens Vermont’s reputation as a favorable location for companies looking for both financial benefits and operational flexibility.

Michigan

Michigan, with an impressive 9.8% growth, takes fifth place for ideal business growth. With an astounding increase in establishments from 275,636 in December 2021 to a noteworthy 302,624 by December 2022, Michigan became the first state to surpass the 25,000-business mark in absolute terms. A significant 24% increase in small business revenue between January 2020 and January 2022—significantly higher than the 6.9% national average rate—further highlights Michigan’s resiliency and advancement. This economic development is evidence of Michigan’s recovery from the harsh depths of the Great Recession and a significant step toward a strong recovery and expansion.

On the other hand, Washington State, which is at the other extreme, has the unfavorableest business growth rate—a startling -16.8%. The state saw a significant decrease of 47,644, falling to 236,796 by December 2022 from 284,440 business establishments in December 2021. Notably, Washington is the only state that has clearly seen a decline in business establishments during this time frame, which highlights the state’s particular and difficult economic conditions.