Insider Monkey

America’s Top 20 States for Business in 2023

Zarah Hamid
10 min read

In This Article:

In this article, we will be analyzing the strategic competitive moves by some of the big companies in the US while going through the country’s top 20 states for business in 2023. If you wish to skip our detailed analysis, you can move directly to America's Top 5 States for Business in 2023.

A Thriving Business Environment

The competitiveness of a firm in a specific location can be attributed to several factors that the business environment has to offer. In the case of the United States, factors such as workforce, government policies, access to capital, and a strong business infrastructure contribute to the success of firms in different states. Let’s look at the state of the business environment in the country.

On June 15, CNBC reported that the country is experiencing a tight labor market with the number of job openings exceeding the available workers. Thus, companies have been trying to relocate to talent-attracting states to where people are migrating. Corporate taxes and the extent of support from the government also impact business decisions of expanding or relocating between states. For instance, Texas is a highly recommended destination for businesses. The state has also been ranked for having the best business climate at the International Economic Development Council Annual Conference in Dallas. On September 18, The Texas Economic Development Corporation reported that corporations prefer to position themselves in Texas because of an absence of state income tax and a supportive government regulatory structure.

Multinationals Settling in Low-Tax Business States

According to the filings reported by the US Securities and Exchange Commission, the period between March 2022 and March 2023 witnessed the largest rates of headquarter relocations by US corporations. Whether it is an attempt to cut costs, benefit from low corporate taxes, or aim at a target market more closely, many companies with a global footprint have migrated their headquarters from high-tax states to low-tax states. Some of these companies include Tesla, Inc. (NASDAQ:TSLA), Caterpillar Inc. (NYSE:CAT), and Hewlett Packard Enterprise Company (NYSE:HPE). The Lego Group has also been planning one such transition for the future. You can also take a look at top US companies with the highest profit margins.

Tesla, Inc. (NASDAQ:TSLA) is a leading manufacturer of electric vehicles. It is also one of the biggest suppliers of battery energy systems across the globe. Back in 2021, the company relocated its headquarters from California to Texas. The rationale behind this migration as reported by Reuters, back in October 2021, was that California was subject to high housing and living costs while Texas had cheap labor, no state income tax, and less strict regulations to offer to the company. However, on February 22, Forbes reported that the EV maker is considering moving its engineering headquarters back to the golden state. The exact timeline for this movement has not yet been specified but the CEO, Elon Musk, announced the upcoming transition of its headquarters to Palo Alto after a 2-year stay in Texas.

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