Florida, Texas rank as top destinations for relocating businesses
Texas is attracting more businesses than any other state, Dallas Fed report finds
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The exodus from high-tax states accelerated over the past decade as Republican-controlled states saw an influx of businesses.
Texas and Florida led the nation between 2010 and 2019 in attracting businesses relocating from other parts of the country, according to a new report published by the Federal Reserve Bank of Dallas.
More than 25,000 establishments relocated to Texas during that period, bringing more than 281,000 jobs with them. That offset the 18,000 establishments that left the state, costing about 179,000 jobs. In total, Texas saw a net migration of 7,232 firms and an addition of nearly 103,000 jobs – the highest among any other state in the country.
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In an aerial view, the downtown skyline is seen on April 11, 2023, in Austin, Texas. (Photo by Brandon Bell/Getty Images / Getty Images)
In net jobs gain, Texas was by trailed Florida, Georgia, Michigan and Arizona.
Florida, meanwhile, was the top destination for businesses looking to relocate, followed by Texas, South Carolina, North Carolina and Arizona.
The report said Texas appeals to businesses for a number of reasons, including its business-friendly environment such as low taxes and light regulation, central location within the continental U.S., growing population and abundant energy resources. Neither Texas nor Florida have an income tax.
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"A lower tax burden is a central part of Texas' appeal to business," the report said.
On the other end of the spectrum, California emerged as one of the biggest losers of jobs and businesses nationwide. Between 2010 and 2019, the Golden State was the source of more than 44,000 jobs relocating to Texas – about 16% of all jobs that moved to the state. Texas, meanwhile, sent just 14,700 jobs to California.
Homes stand in front of the downtown skyline on August 30, 2023 in Los Angeles. (Photo by Mario Tama/Getty Images / Getty Images)
It is not just businesses that are leaving California. A growing number of Americans are also migrating to places like Florida and Texas, according to a Bank of America analyst note that is based on aggregated and anonymous internal customer data.
"We constructed near real-time estimates of domestic migration flows and found that pandemic migration trends are not reversing," the analysis said. Since the first quarter of 2023, the data "suggests that cities that saw a large influx of people during the pandemic have still been growing faster than other cities in recent quarters."
The analyst note found that San Francisco experienced a sharp drop in population at the start of the year, with a more than 1% drop in the first quarter of 2023 and a more than 3% decline from 2020 to 2022.
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The city has been plagued by a spike in property-related crime, according to the California Department of Justice’s Criminal Justice Statistics Center.
"This population shift paints a clear picture," said Janelle Fritts, a policy analyst at the nonpartisan Tax Foundation. "People left high-tax, high-cost states for lower-tax, lower-cost alternatives."