News Provided by Baker Tilly
March 4, 2021
For many companies, the decision to move to or build new in Texas is simple: there is no state income tax and there is limited regulation. The cultural history of the state celebrates the autonomy of individuals, and this mindset sets the tone for how the state and local governments nurture the state economy.
Still, for companies investigating moving all or part of their organization to Texas, low taxes and limited regulation are just the beginning. As part of their relocation research, companies should also look at gaining a competitive edge, the available talent pool in the state, local economic development incentives, and supply chain resiliency.
In 2020, Texas led the U.S. in exports, as it has every year since 2001, according to U.S. Census Bureau data. Last year, Texas’s $279.3 billion worth of exports was greater than the combined worth of the three next largest exporting states: California ($156 billion), New York ($61.9 billion) and Louisiana ($59.6 billion). While oil and gas extraction is still the largest industry sector in the state, Texas now has one of the more diverse economies in the country, attracting companies in financial services, manufacturing and distribution, professional services, transportation and healthcare, to name other key drivers of state gross domestic product (GDP). In 2020, Texas hosted 50 Fortune 500 headquarters, trailing only California and New York in this category.
Five of the top 15 largest cities in the U.S. and two of the top five largest metropolitan statistical areas (MSAs) are in Texas. Houston and Dallas are the focus of many corporate relocations, in large part because of the infrastructure in place. Both cities have international airports. Houston has a major port and Dallas has a major intermodal hub to facilitate over-the-road distribution and transportation. You can fly anywhere in the world nonstop.
