There are many reasons why businesses are moving to Arizona. The Phoenix Metro Area is home to a large and growing economy, for starters. In addition, the area offers a number of incentives for businesses, including tax breaks and reduced utility rates.
Central Arizona, including the Phoenix Metro Area, is well-positioned for distribution centers and company headquarters. There are numerous new developments in this area attracting businesses from all over the country. An example of a company that is being established in Central Arizona is Funko Inc.
The company is a leading pop culture lifestyle brand. After relocation to Arizona, the distribution center will create over 300 jobs. The following are some factors that are making more businesses relocate to Arizona.
1. Business Tax
One major reason businesses are moving to Arizona is the state’s business-friendly tax environment. The state has no corporate income tax, and its personal income tax rates are among the lowest in the nation.
In addition, Arizona offers a number of tax incentives for businesses, including a sales tax exemption on manufacturing equipment. Compared to cities such as Seattle, New York, San Francisco, and Los Angeles, Arizona has relatively low corporate taxes.
In Seattle, for example, businesses are subjected to business and occupation tax, retail sales/use tax, and personal property tax. Seattle has an income tax of 7.6%, and New York City has an income tax of approximately 8.85%. Los Angeles and San Francisco have an income tax of 9.3% and 8.84%, respectively.
Arizona has an income tax of 5.6%, making it the lowest among the cities. These low-income tax for Arizona makes it a suitable location to start or relocate a business.
2. Right to Work
Arizona is a right-to-work state, which means that employees cannot be required to join a union as a condition of employment. In Arizona, the right to work is a law that allows employees to choose whether or not they want to join or financially support a union as a condition of employment.
This law benefits businesses because it increases competition and creates a more favorable environment for job growth. This also makes it easier for businesses to operate in the state and help keep labor costs down.
However, there are potential downsides to right-to-work laws if employers abuse them. For example, if an employer requires employees to join a union in order to be hired, this could lead to higher costs for the business and decreased job satisfaction for employees.
These potential downsides should always be considered before implementing the law.
3. Affordable Housing
Housing costs in the Phoenix Metro Area are relatively affordable compared to other major metropolitan areas. In order to understand how Arizona’s median wage affects the cost of employment and the overall cost of business, it is important to look at some statistics about the state.
For example, according to Zillow, the median home for sale in Buckeye, AZ is $226,800. In Los Angeles, CA, the median home value is $605,000. This means that it costs more than twice as much to own a home or start a business in Los Angeles than it does in Buckeye.
This can be a big benefit for businesses looking to relocate or expand their operations in Arizona. The cost of living in a state is not just about housing costs. It is also important to look at the cost of other necessities like food, transportation, and healthcare.
According to The Council for Community and Economic Research, the cost of living in Los Angeles is 22.0% higher than the national average. In comparison, the cost of living in Buckeye is only 11.0% higher than the national average.
This means that it costs more to live in Los Angeles than in Buckeye, but not as much as one might think, given the difference in housing costs. When it comes to median wages, Arizona’s are lower than both California and Texas.
According to the Bureau of Labor Statistics, the median wage in Arizona is $17.04 per hour, while the median wage in California is $19.65 per hour, and the median wage in Texas is $18.28 per hour. This means that the cost of living is lower in Arizona than in either California or Texas.
Therefore, businesses in Arizona have to pay their employees less than businesses in California or Texas. This means that they can afford to hire more employees and lower their overall labor costs.
Additionally, the lower cost of living in Arizona means that businesses can get by with less revenue than they would need in California or Texas. All of this results in a lower overall cost of doing business in Arizona than in either California or Texas.
So, if you’re looking to start a business or move your business to a new state, Arizona is a great option. The median wage is lower than in many other states, which means that the labor costs will be lower. Additionally, the cost of living is relatively low, meaning that one won’t need to bring in as much revenue to cover their expenses. All of this makes Arizona a great place to do business.
4. Tax Incentives
Arizona offers a number of tax incentives for businesses, including a corporate income tax credit, property tax abatements, and sales tax exemptions. These incentives make it possible for businesses to operate in the state at a lower cost than they would in other states.
Additionally, Arizona has a relatively low overall tax burden compared to other states. This means that businesses in Arizona can keep more of their profits and reinvest them back into the business.
Overall, the tax environment in Arizona is favorable for businesses. The state offers a number of incentives that make it possible to operate at a lower cost than in other states. Additionally, the overall tax burden is relatively low, allowing businesses to keep more of their profits.
If you are considering doing business in Arizona, be sure to take advantage of these tax incentives.
Conclusion
There are many reasons why businesses are moving to Arizona. The state offers a variety of benefits, including a business-friendly tax environment, right-to-work laws, and affordable housing.
In addition, the Phoenix Metro Area is home to a large and growing economy. With all of these factors considered, it’s no wonder that more businesses are choosing to relocate to Arizona.
