Question 1

Which US state is most business-friendly overall?

Accepted Answer

Based on combined scores across cost of living, corporate tax rates, energy costs, crime rates, and property tax, states like Wyoming, South Dakota, and Nevada consistently rank highest. These states have no corporate income tax, moderate property taxes, and lower crime rates. However, the best state for your business depends on your specific industry, workforce needs, and customer base.

Question 2

What factors does the Business Location Score measure?

Accepted Answer

The tool scores six dimensions: (1) Cost of Living — BEA Regional Price Parities measuring relative goods and services costs; (2) Corporate Tax Rate — top marginal state corporate income tax from the Tax Foundation; (3) Commercial Electricity — EIA commercial electricity price per kWh; (4) Violent Crime Rate — FBI UCR violent crime per 100K residents; (5) Property Crime Rate — FBI UCR property crime per 100K residents; and (6) Property Tax Rate — Census ACS effective property tax as a percentage of home value.

Question 3

How is the 1–5 score calculated for each dimension?

Accepted Answer

Each state is ranked by percentile among all 50 states and DC. Since lower values are better for all six dimensions (lower cost, lower tax, lower crime), states with the lowest raw values earn the highest scores. A score of 5.0 means the state ranks among the very best on that metric, while 1.0 means it ranks among the worst. The overall score is an equal-weighted average across all dimensions.

Question 4

Do states with no income tax always score better?

Accepted Answer

Not necessarily. States with no corporate income tax (Wyoming, South Dakota, Nevada, Texas, Washington) benefit on the tax dimension, but they may have higher property taxes, energy costs, or cost of living that offset the advantage. Texas, for example, has no state income tax but significantly higher property taxes than the national average. The overall score accounts for all six factors, giving a more complete picture.

Question 5

Should I choose a business location based solely on tax rates?

Accepted Answer

No. While taxes are important, other factors — workforce quality and availability, proximity to customers, industry clusters, real estate costs, and regulatory environment — often have a larger impact on long-term business success. Low-tax states may have shallower talent pools for specialized roles. This tool provides a data-driven starting point, but should be combined with research into workforce availability, customer proximity, and industry-specific regulations.

Metric	Best States	Worst States
Corporate Income Tax Rate	WY, SD, NV (0%)	NJ (9%), MN (9.8%)
Cost of Living (BEA RPP)	MS, WV, AR	HI, DC, NY
Commercial Electricity (¢/kWh)	WA, ID, OK (7–9¢)	HI, CT, MA (17–35¢)
Violent Crime Rate (per 100K)	ME, NH, VT (<200)	NM, AK, MS (>600)
Effective Property Tax Rate	HI, AL, CO (<0.5%)	NJ, IL, CT (>2%)

Business Location Score — Compare All 50 States on Cost, Tax & Safety

What This Tool Measures

Score Methodology

Top Business-Friendly States

When to Use This Calculator

Choosing Where to Incorporate

Expanding to a Second Location

Hiring Remote Teams

Industry Benchmarks

Common Mistakes When Choosing a Business Location

Focusing only on state income tax

Ignoring labor market quality

Not checking for state-specific regulations

Choosing based on where you live, not where your customers are

Data Sources

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