Motivational

Why Are So Many Businesses Moving to Texas All of a Sudden?

Admin

posted on 2 months ago — updated on 1 second ago

58
views

Here's why they're moving some of their operations to the Lone Star State.

Search ... Results See all results

Quick Links

SECTIONS

JOIN US

GET IN TOUCH

CONNECT

Instagram Facebook Tiktok Linkedin Pinterest X-twitter

Get SUCCESS® Magazine PLUS 80+ Hours of Exclusive Training (& More!) to Multiply Your Earning Potential SUBSCRIBE TODAY!

Save Up to 20% Before Oct. 2!

BOOKMARK Share

TABLE OF CONTENTS

The front of a Kentucky Fried Chicken location building

Kentucky Fried Chicken recently announced plans to leave its namesake state, making it the latest major corporation to join the mass business migration to Texas. The restaurant chain follows corporations like X (formerly Twitter) and Realtor.com, which both moved to the Lone Star state within the last year.

Businesses are leaving high-tax states in growing numbers, and Texas is reaping the benefits. The state’s lighter regulations and tax breaks have caught the attention of many companies, from startups to Fortune 500s, that are looking for a new home.

But relocating to Texas isn’t necessarily the right move for every company. Let’s talk about why.

One of the biggest draws for businesses that are considering a move to Texas is its tax structure and regulatory environment. “Part of the reason I see an exodus from California is because they have some cumbersome regulations,” says Mina Haque, PLLC, CEO of Tony Roma’s and a practicing attorney who has helped businesses navigate state transitions. “For example… California has rules like, ‘You have to pay your employees’ Internet.’” When businesses move to Texas, they no longer incur these expenses because “although [the state] protects employees, Texas is definitely more employer-friendly.”

According to Spencer Carroll—CPA and account executive at Gelt and adjunct professor of accounting at Palm Beach Atlantic University—Texas also offers significant financial incentives that can impact a company’s bottom line. “Not only is Texas a no-state-income-tax state, but a lot of the times when these big major companies move into town… they’ll work with the local governments to get special tax deals for moving a big economic booster, which is their company, into the state.”

For large businesses like KFC or X, these tax savings go a long way toward expanding operations and sales efforts or increasing shareholder profitability.

In addition to the tax deals, Haque says that “the Texas government also gives funds that invite businesses to set up over there. Their development funds are also extremely attractive, especially for startups.” This makes the state a salient alternative to other start-up friendly states, like California.

Beyond corporate benefits, the state’s tax structure can also benefit company leadership and employees, particularly in the tech sector. “[For] a lot of people in the startup [and] technology world, the big money makers for those founders and employees is if the company goes through [an] exit,” Carroll says. But if an employee or founder lives in a high-tax state, “that could be millions of dollars’ difference for you in terms of take-home when the company you work for or the company you founded goes public or has an exit,” he says.

Overall, Carroll says, moving to Texas or another low– or no–state tax state can be a big material benefit to those who stand to make the most from a sale or IPO.

For small business owners, the decision to relocate requires careful consideration. Because of this, Carroll advises them to think twice before making the move.

“Usually, it makes the most sense to incorporate your business in the state that you live in, ” he says. “If I lived in California and wanted to start a small business, if I incorporate [it] in Texas, that doesn’t save me from paying state income tax… in California. All that it’s doing for me is adding an extra administrative burden where I have to file annual reports with the state of Texas and pay a franchise fee.” As a result, moving may not make sense for smaller businesses.

However, as businesses grow, the financial benefits become more compelling. “Take 10% multiplied by… let’s call it $500,000 or [$1 million] in profit for your business,” Carroll says. “We’re talking $50,000 to [$100,000] in income tax that you are just paying to California.” A business owner could save that money by moving to Texas, which could mean extra profit or more money to fuel the business’s growth.

Companies must carefully evaluate their legal obligations in both their current state and in Texas before moving. “Legally, what a company should do when they’re making the complete move is… [to] do a dissolution of wherever they are incorporated… then do the filing in the new state,” Haque says.

Some companies, like Meta, move only specific departments rather than their entire operations. This strategic approach can help businesses take advantage of Texas’s employer-friendly laws.

“When it comes to non-competes, California is more employee-friendly than Texas,” Haque says. With mass layoffs and ongoing shifts in the political climate, moving to an employer-friendly state may create significant savings on legal costs and other HR-related matters.

Before making the final decision to relocate, businesses should consider several key factors beyond just the potential tax savings. “If you’re selling [a] product, where is the product coming from?” Haque asks. ”Do you want to be near any ports?”

For instances, one of her legal clients sells luxury timepieces, so they headquartered in California—but since they were “wasting [money] on freight expenses,” she says, they moved to Virginia, another tax-friendly state.

Carroll adds that lifestyle factors should also play a role for small business owners. “There’s more to life than just optimizing your taxes,“ he says. “If you’re from California [or] have friends and family in California, just saving thousands of dollars on taxes [is] probably not worth packing up and moving.”

However, the savings could justify the move for single entrepreneurs or growing businesses with significant profits. “If you’re a single guy or gal and you have a successful business, and you’re paying $100,000 in income tax to California, you could probably do a lot of things with an extra $100,000 per year,” Carroll says. “Maybe it’s worth moving to Austin.”

Photo by Naypong Studio/Shutterstock.com

Ashley Couto is a writer, career coach and flexible work and leadership consultant.

5473 Blair Road, Suite 100
PMB 30053
Dallas, TX 75231

Save Up to 20% Before Oct. 2!

Unlock the Latest Knowledge that Can You Help You Achieve More in Life with More Confidence

Print and Digital Options Available

Oops!

You’ve reached your limit of free
articles for this month!

(plus get access to hundreds of resources designed
to help you excel in life and business)

Please enter your username or email address. You will receive an email message to log in.

No, thanks, I’m not interested in personal growth.

Plus, get access to daily inspiration, weekly newsletters and podcasts, and occasional updates from us.

By signing up you are also added to SUCCESS® emails. You can easily unsubscribe at anytime. By clicking above, you agree to our Privacy Policy and Terms of Use.

Please enter your username or email address. You will receive an email message to log in.

Get unlimited access to SUCCESS®
(+ a bunch of extras)! Learn more.

Please enter your username or email address. You will receive an email message to log in.

The exclusive article you’re trying to view is for subscribers only.

(plus get access to hundreds of resources designed
to help you excel in life and business)

Please enter your username or email address. You will receive an email message to log in.

https://www.success.com/why-businesses-are-moving-to-texas-in-2025/