A lot of companies are leaving California and other states, and they’re relocating to Texas. This has been happening for some time, but experts believe that 2021 could be the “biggest year ever” and see mass relocations.
Over the last decade, reports claim that at least 200 companies have switched from other states to Texas intentionally. This does not even count start-up companies that may have opted to simply start in Texas initially, rather than picking a state like New York or California and then moving.
The tax implications
There are a lot of reasons to run a company in Texas, but the biggest driver behind all of these relocations is simple: taxes. The laws in Texas provide breaks not found in other states, so it is seen as something of a tax haven. From a bottom-line perspective, companies can keep more of their earnings. A few of the benefits include:
- A business-friendly climate
- No corporate income tax
- Fewer regulations
- A central location within the country that is close to railways and ports
When a company’s main goal is to increase revenue and expand operations, Texas may make that possible in ways that other states will not.
What companies have already moved?
It’s not just small companies or tech start-ups that are moving — though there are rumors that Tik-Tok may make the move. Many of the companies who have moved their headquarters are very well-established, such as PGA of America, McKesson, AT&T and Charles Schwab.
Beyond pure relocations, expansions into Texas have also been popular as of late. Some companies that are often associated with California, and that still do operate there, have also expanded into Texas. These include giants of the tech industry like Google, Facebook and Apple.
Running your business
If you’re thinking of starting a new business in Texas or moving your company here from another state, you’re definitely not alone. Make sure you know exactly what legal steps you’ll need to take.