Compared to its performance earlier in the year, Colorado saw a notable increase in business formations in September. The state’s competitive corporate tax rate (4.25%) and targeted incentives, such as renewable energy tax credits and Strategic Fund Job Growth Incentive are attractive to companies in tech and renewable energy sectors. Despite new and stricter labor regulations and a state-level paid family leave program that was introduced in 2024, Colorado’s business-friendly reputation and continued growth in the tourism and service industries have outweighed these challenges. The combination of no franchise taxes, proactive economic development, and a stabilizing housing market has solidified Colorado’s position as a hub for diverse business growth.

Vermont’s increase in business formations has been strong all year, and September has been no different. The state has maintained a stable and supportive environment for small businesses, tech startups, and green energy companies. Generous tax incentives for businesses and funding programs through the state attract entrepreneurs, particularly in agriculture, sustainability, and rural development. While the state’s high corporate tax rate (8.5%) and labor costs (minimum wage is at $13.67 per hour and set to rise in January) pose challenges, the growth of tech and agricultural sectors has helped offset challenges like housing costs and labor shortages.

California has seen strong increases in formations in September despite lagging numbers earlier in the year. After a tough start to 2024, the state surged back into the top five by July, recovering from early-year declines and narrowing the gap with 2023’s high growth. The state’s thriving tech, energy, and entertainment industries and incentives, like the California Competes Tax Credit, remain attractive to business owners despite its notorious high costs. Challenges of high corporate tax rates (8.84%), strict worker classification laws, and rising compliance costs aren’t scaring entrepreneurs off in light of California’s access to venture capital and programs targeting minority-owned businesses. Even though the state’s regulatory environment and high cost of living remain hurdles for many businesses, California continues to see boosts in connectivity and economic potential.

Alaska’s continued increase in business formations in 2024 reached a high in September and could be attributed to growing opportunities in industries like tourism, fisheries, and oil and gas, supported by initiatives such as the Alaska Small Business Development Center’s TREND program. The state’s friendly tax climate, including no state sales tax and a low corporate income tax rate (staring at 0%), has made it attractive to small and medium-sized businesses. Despite challenges like high operational costs and labor shortages, especially in healthcare and construction, Alaska’s natural resources and skilled workforce continue to inspire business owners. State programs like the Alaska Economic Development Incentive and AIDEA also help support businesses in key areas and aim for future stability.

Maine’s boost in business formations in September could be credited to recent tax reforms that have made the state more appealing to new businesses. The estate tax was eliminated in January, easing the financial load on business owners and their families, while the Pine Tree Development Zone Program seeks to reduce state taxes for new businesses in that area. These moves were part of a larger effort to make Maine more business-friendly and to spur economic growth. Though challenges like labor shortages and high property taxes remain, state programs like the Maine Technology Institute are helping innovation-driven businesses get started, creating a solid foundation for growth.

Delaware’s business climate is heating up, thanks to a combination of corporate-friendly tax laws and a highly skilled workforce. The state’s flexible regulations, like its rapid incorporation process and the Court of Chancery’s efficient business dispute resolution, make it a top choice for both small startups and large corporations. There’s a reason why nearly 70% of Fortune 500 companies incorporate in the state. On top of that, Delaware’s funding resources, like the EDGE Grants and low-interest loans for business expansion, are fueling growth in thriving sectors like finance, biotech, and healthcare.

Texas is seeing another increase in business formations in September, driven by its pro-business environment, which includes no state income tax or corporate income tax. Its strong tech, energy, and manufacturing industries are supported by increased investments in infrastructure and workforce training. Programs like the Texas Enterprise Fund and Texas Small Business Credit Initiative provide financial incentives for high-paying jobs and targeted support for small businesses. Even as housing costs rise and debates over environmental regulations rage on, Texas’s strong economy, growing population, and competitive tax advantages make it a magnet for entrepreneurs.

There was a spike in business formations in Iowa, thanks to its low corporate tax rate, which dropped from 8.4% to 7.1% earlier this year—a 15.5% reduction designed to attract investment. The state’s more simplified regulatory environment and targeted incentives (like grants and tax credits from the Iowa Economic Development Authority) support thriving industries such as manufacturing, technology, and renewable energy. And programs like the Rural Innovation Program also provide a boost to businesses in underserved areas, expanding Iowa’s reach. With a well-educated workforce, low costs of living and doing business, and a strong focus on growing industries, Iowa continues to charm business owners, even without the typical major urban hubs.

Montana is also benefiting from a rise in business formations, especially in the tech and renewable energy sectors. This is in part fueled by targeted state-backed funding initiatives like the Montana Economic Development Program and the Montana Small Business Credit Initiative. Recent changes in regulations—including streamlined business registration processes and reduced agency oversight—have made it easier for entrepreneurs to set up shop while supporting growth in high-tech and rural areas. Even as it struggles with rising housing costs and a tighter labor market, the state’s steady population increase and low business tax rates (6.75%) continue to attract businesses looking for lower overhead costs. With its natural beauty, high quality of life, and ongoing infrastructure improvements (like expanded rural broadband), Montana is carving out a spot for itself on the leaderboard.

Ohio is having an uptick in business formations in September, strengthened by the lack of corporate income taxes and targeted incentives for technology and manufacturing sectors (like the Innovation Ohio Loan Fund and the state’s R&D Investment Loan Fund). Recent reforms in regulations and tax credits for job creation have made it easier for people to launch businesses, especially in urban development areas—supported by programs like Ohio Third Frontier and the Ohio Development Services Agency. Despite challenges like a declining rural population, Ohio’s skilled workforce and thriving healthcare and tech industries are driving growth. With its diverse economy, moderate cost of doing business, and affordable housing, Ohio remains attractive to startups and expanding companies.

This September, Minnesota saw a drop in business formations due to rising costs, especially in labor and goods, along with its relatively high taxes (with a flat 9.8% corporate tax rate) and regulatory environment. The state’s decision to raise the minimum wage to $15 an hour for large employers has upped labor costs, while new environmental rules and corporate tax rates are adding financial pressure. Despite a strong workforce and funding options, challenges like long winters, inflation, and tough competition from neighboring states are making Minnesota less appealing for new businesses. Plus, slowdowns in industries like agriculture and manufacturing are further stalling growth.

Alabama’s been seeing a decline in business formations, including this September, largely due to ongoing workforce challenges and shifts in its regulatory landscape. Even though the state offers low taxes and a lower cost of living, businesses—especially in manufacturing and retail—are struggling with labor shortages and competition from nearby states. Add in changes to tax filing requirements and continued workforce issues, particularly in rural areas with limited infrastructure, and it’s no wonder entrepreneurs are feeling hesitant. While incentives are available, such as the state’s Growing Alabama Credit, these challenges could be holding potential business owners back.

Louisiana has seen another dip in business formations at the same time as they experienced environmental challenges like hurricanes and flooding. While the state offers competitive tax rates (corporate income tax rates range from 3.5-7.5%) and incentives, sectors like tech, finance, and healthcare are still catching up, leaving fewer opportunities for entrepreneurs. High operating costs, complicated regulations (the complex environmental permitting process, for example), and frequent natural disasters make it tough to keep businesses running, especially in energy and construction. On top of that, workforce issues like skills gaps and labor shortages are adding extra pressure on industries trying to stabilize and grow.

Georgia’s been struggling with business formations all year, thanks to rising labor costs, competition for skilled workers, and higher transportation costs. While tech and logistics are still going strong, sectors like construction and retail are facing major hurdles like labor shortages and inflation, which are making it tough for new businesses to keep up. Plus, tighter labor and environmental regulations have raised concerns, especially for industries trying to stay competitive. This includes stricter emissions standards and labor cost increases. Even with funding programs available, like the Georgia Venture Capital Investment Fund and some state-backed loans, diverse businesses not associated with tech and manufacturing still find it harder to secure capital.

Florida has seen a drop in business formations in September, mainly due to rising living costs in major cities (especially in housing), plus environmental risks like hurricanes and flooding. Even though the state offers tax relief and incentives, sectors like manufacturing are slowing down, and rising utility costs are making business owners think twice. On top of that, labor shortages and an aging workforce in key industries are adding to the uncertainty. Still, Florida’s business-friendly reputation and influx of corporate relocations show it still has strong appeal in certain sectors.

While Utah started the year with strong increases in formations, its drop in formations after this summer might be traced to rising housing costs, labor shortages, and growing concerns over regulations. While the state’s competitive tax rates (4.55% corporate income tax) and support for tech and finance are still big draws, things like high housing prices and stricter environmental rules in sectors like construction have made it tough to operate. Add in traffic congestion in cities like Salt Lake City and worries over potential minimum wage hikes, and it’s clear why some businesses are hitting the brakes. Despite Utah’s great quality of life, these challenges are making it harder for entrepreneurs to start or grow their ventures.