Texas With The Best Business Climate In The United States

In Texas, a business needs Texas Tax ID to open a bank account under the business name, to apply for licenses and to file an income return. It is important for a new business to immediately apply for the Tax ID to avoid unnecessary delays in getting the required licenses as well as financing options.

The state of Texas is considered as having the best business climate in the United States; Illinois is the worst. Texas has grown by 13% since 2010 to make it to the top of the 50 states. Illinois managed to register a negative 0.22 % for the same period, 48th in the nation. Texas makes it easy for businesses to start and thrive.

As a result, Texas per capita state and local tax burden of 7.6% in 2011 ranks 46th from the highest. In Illinois, the tax burden was 11%, 5th highest. The corporate tax rate of Texas is higher than that of Illinois but small and medium-sized businesses do not pay corporate taxes. Texas does not have an income tax and no lawmaker will attempt to even hint at an income tax.

Many consider Texas to be quite lax on environmental regulations because they are passing external costs in the future to Texans instead of the businesses themselves. The most important message that Texas sends out to all is “We are open for business.” However, the circumstances of Texas are different from other states like Illinois.

Texas is a right-to-work (RTW) state which means that employees are not required to pay union dues. This policy has weakened unions. In Illinois, RTW will not work because although unions have been diminished, they are still strong under the Democratic Party. The issues may be partially solved when the US Supreme Court rules that state employees will no longer pay union dues.

However, no matter the differences in tax burden among states, it remains important for businesses to obtain a Tax ID. The application process for Texas Tax ID has been simplified through online application forms. Businesses that are required to obtain a Tax ID include those with employees, corporations, partnerships, trust, estate or non-profit organizations including S corporations.

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