Florida may be known for its sun and fun, but if you are an entrepreneur looking to start a business, one study casts shade on the Sunshine State.
According to Simplify LLC, an organization that assists small business owners, Florida ranks as the 18th most expensive state to start a business in 2025. The rankings were determined by analyzing key factors — taxes, business filing fees, commercial rent and utilities, labor costs, regulations and small-business lending.
Florida’s heavily regulated environment, high electricity costs, wages and corporate tax rate contributed to its rating. The state also ranked eighth worst in the percentage of working-age people participating in the workforce (58.3%). North Dakota was the best state, with 68.8%.
There was one bright spot for Florida: It ranked No. 3 under the best category for the number of Small Business Administration (SBA) loans, at $12.1 million per 100,000 residents.
Utah came in as the least expensive state, followed by South Dakota, Colorado, Wyoming and Montana. In fact, the 14 least expensive states are in the Mountain West or the Midwest.
California ranked as the most expensive state in which to start a business, followed by New York, Hawaii, Tennessee and Massachusetts.
A few other measurements: North Carolina had the best average corporate income tax rate (2.5%) while Minnesota had the worst (9.8%). Montana had the least expensive LLC filing fees ($35) and Massachusetts had the highest ($500). Kansas and West Virginia were tied as the least expensive average commercial rent per square foot ($12.33); Hawaii had the highest ($36).
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