In recent years, companies such as Tesla, Oracle, and Hewlett Packard have moved or expanded to Texas. The state’s 2023 economic snapshot reveals that Texas has added more jobs over the last 12 months than any other state.
What are the reasons for doing business in Texas?
Texas offers a number of competitive advantages for businesses looking to start or move operations. The state offers several incentive programs that provide funding, rebates, and corporate tax credits for both large and small businesses. Examples include the Texas Enterprise Fund (“the largest deal closing fund of its kind in the nation”), Skills Development Fund, Texas Enterprise Zone Program, and the Texas Capital Fund Infrastructure Program.
Other incentives include a low cost of doing business, no corporate income tax, a large and growing consumer market, and a vast talent pool of educated and skilled workers. Texas is also a right-to-work state.
What is the cost of doing business in Texas?
Companies doing business in Texas enjoy a low overall tax burden compared to the rest of the U.S. Texas does not have a corporate or personal income tax at the state level, though taxable entities formed or doing business in the state are subject to a franchise tax.
Business operating costs and the cost of living are also lower compared to other states.
What is the state of infrastructure in Texas?
Texas continuously invests in its infrastructure, including its vast Texas Multimodal Freight Network (or “the Network”), which moves billions of tons of freight each year. According to the Texas Economic Development Corporation (TxEDC), a nonprofit that promotes economic development in Texas, Texas’ infrastructure has helped the state become the top exporter in the U.S. for 21 consecutive years.
The state’s power grid is still vulnerable to extreme weather events after a cold wave disabled the grid in 2021. However, improvements are being made to strengthen the grid.
What are the challenges of doing business in Texas?
Companies may need to assess the impact of recent legislation, such as Texas’ anti-abortion laws, on their employees, investors, and public perception. Businesses that promise to support employees who wish to obtain the procedure may also be exposing themselves to liability.
Business disruptions due to extreme weather (heat waves, flooding) are another consideration.