Tri-state region not tax-friendly to start-ups 

Starting a business in a tax-friendly location is critical and goes beyond choosing a state with no corporate tax, particularly in an uncertain economy, according to Simplify LLC”¯ — a team of accountants and attorneys offering guidance to small-business owners. A bevy of taxes affect whether a start-up succeeds. Income taxes influence take-home pay. A high sales tax means a competitor could charge less. Property taxes increase overhead. And unemployment taxes affect labor costs. 

Simplify”™s new study on the ”¯“Most Tax-Friendly States to Start a Small Business,” which uses 2023 data from the U.S. Department of Labor, Tax Foundation and Federation of Tax Administrators, ranks the tri-state region as the least tax friendly for start-ups. New Jersey has the second-highest per capita property taxes in the country ($3,538), right behind Washington, D.C. ($4,497). New York has high property and personal taxes and fairly high unemployment and corporate taxes, although a low sales tax (4%), while Connecticut has high property, personal, sales and corporate taxes but the lowest unemployment rate in the nation at 5.4%. 

The 10 most tax-friendly states are Nevada,”¯South Dakota,”¯Washington,”¯Wyoming,”¯Texas,”¯North Carolina,”¯Florida,”¯Missouri,”¯Ohio”¯and Alabama, with the top five having no personal or corporate taxes. ”¯ 

Another key finding:  the average state-local tax burden as a share of income was”¯11.2%”¯in 2022 — the highest in decades.”¯ 

Click here for the full study, including tips on easing your tax burden.