Only California Is a Worse Place to Start a Business Than New York

Every time I look at our monthly household expenses and feel my jaw drop, I tell myself I'm just overanalyzing things or forgetting a zero somewhere. But as it turns out, that financial ache isn't a personal hallucination, especially if you're trying to run a business in New York. Keeping the lights on and covering basic overhead in the Empire State isn't just tough. It's officially one of the most expensive places in the country to get a business off the ground.

A ranking from SimplifyLLC, an online small business advisor, looked at nine cost-related factors across every state, including corporate income tax, business filing fees, commercial rent, electricity, wages, and access to lending. When the dust settled, California and New York came out as the two most expensive states in the country for starting a new business. New York landed at number two, which tracks with every conversation I've ever had with a local business owner about their monthly overhead.

New York's High Wages, Electricity, and Regulations Are Driving Up Costs

If you're a local business owner wondering why your bank account feels targeted, the breakdown of this study explains a lot of it, and probably confirms what you already suspected. New York carries the second-highest regulatory burden in the country at 300,095 state regulations, along with high average wages of $91,428 a year. The state's average commercial electricity bill runs $907.99 a month, and its corporate income tax sits at 6.88%.

None of those numbers move on their own. They stack, quietly, month after month, until you're staring at a spreadsheet wondering where it all went. If you've ever opened your electric bill and audibly gasped, you already know exactly what this data is describing.

California Is the Only State More Expensive Than New York for Starting a Business

If there's any comfort to be found, it's that we aren't California. Small mercies. The Golden State ranked as the single most expensive state to start a business, driven largely by having the highest number of business regulations in the nation at 420,434. California businesses also face the third-highest corporate income tax rate in the country at 8.84%, along with commercial rent averaging $31.78 per square foot.

So next time you're grinding your teeth over a New York tax bill, just remember someone in California is grinding theirs even harder. Rounding out the rest of the top 10 most expensive states are Hawaii, Tennessee, Massachusetts, Alabama, New Jersey, Washington D.C., Illinois, and West Virginia. Misery loves company, and apparently company loves expensive commercial rent.
Yahoo Finance

Utah Ranks as the Cheapest State to Start a Small Business

Just to put things into perspective, the same study looked at the cheapest places to open up shop, and the contrast is almost insulting. Utah came out as the cheapest state in the country for starting a new business, thanks to one of the lowest corporate tax rates in the nation at 4.65%, along with low utility costs and modest average wages of just under $64,000 a year. Meanwhile, here we are, doing math that makes us want to lie down.

The rest of the 10 least expensive states are South Dakota, Colorado, Wyoming, Montana, Idaho, Nebraska, Kansas, Nevada, and North Dakota. A good chunk of the Mountain West, apparently, while the Northeast keeps quietly bleeding out through utility bills and regulatory paperwork.

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So to all the New York entrepreneurs out there making it work despite the regulations and the electric bills, you deserve a medal. Or at least a very long, highly caffeinated coffee break.