A recent report from the Tax Foundation details states with the best business tax climates, and for all of the reasons we all talk and read about, I expected to see Texas at the top of the list. To my surprise, the state came in at No. 11. Although it’s still a good showing, Texas did not rank as high on the list as expected. Although Texas enforces no state income tax, our sales and property taxes pull us down.
The real news is that, of the states in the top 10, Texas has by far the most significant business economy. Comparatively, while Wyoming ranks No. 1, it is a very small economy with minimal growth, as is the case with pretty much all of the states in the top 10. In fact, of those states, only Florida stands out as being an economy with any scale and decent growth.
The chart below from JLL’s research team tracks total state-level GDP against GDP growth since 2010. As you can see, Texas comes out way ahead of all of the top contenders in terms of both magnitude of the economy and recent growth. Even more telling is that the DFW metro region alone ranks ahead of every state except Florida.
With this data in mind, the reasons why so many companies are looking to Texas and to DFW for their headquarters offices or expanded corporate offices become clear.
Greg Biggs is managing director at JLL. Contact him at [email protected]