been going down a rabbit hole on this lately.
started because i was thinking about where to register my next business and everyone has an opinion. texas. florida. wyoming. nevada. the usual list. but when i actually started looking at formation data instead of just tax rate comparisons, the picture gets more complicated.
states that show up on every most tax friendly list arent always the ones seeing the highest growth in new business registrations. and some states with higher tax burdens are still pulling in significant formation numbers, probably because of talent, infrastructure, or industry clusters that matter more to certain founders than the tax environment. what i found interesting is that formation data is one of the cleaner ways to measure this. if a state is genuinely business friendly, founders vote with their registrations. the numbers tend to be more current than census data which lags by a year or more and the regional patterns are worth looking at before making any assumptions based on tax rates alone.
looking into tax friendly states for business, the data is more interesting than i expected
byu/Phiyo_Samoura16 intax
Posted by Phiyo_Samoura16
1 Comment
There is a simple answer.
You form your business in whatever state you operate in.
It doesn’t matter if your LLC is in tax free Wyoming when you live and operate out of California. You’ll always pay the same amount of tax to California. For the vast majority of small businesses it makes sense to form in their home state.