Here in the Lone Star State, we've had lots of recent success stories about bringing in many new businesses from California and New York, where the business climate is increasingly hostile due to higher taxes and increased regulations and restrictions.  Businesses and citizens continue to leave by the droves.  Enter New York state, in an attempt to stop the bleeding, now running ads for "Tax Free Zone" in local Texas television markets.  The ads brag that new businesses will operate "tax free" for 10 years.  The ad follows up the START-UP NY program put in motion by Governor Andrew Cuomo on October  22, 2013.  The ads have been running in major Texas cities and the Lower Rio Grande Valley.

A May 2013 press release states, "Under Tax-Free NY, Any New Business Will Be Able to Operate Tax Free on a SUNY Campus for Ten Years."  That's all well and good, but most businesses plan to be around longer than 10 years.  They also like to be flexible about location.  More to the point, they don't like surprises, even ones they might plan for.  The New York state taxes in question are significant -- state income tax; business tax; corporate, state, and local taxes; property tax; and franchise tax.  Businesses will still have to contend with federal regulatory and tax laws anywhere they set up, but they'll have to plan out the big state tax hit in 10 years.  If the startup works, great, but I wonder: if you have to shut down and leave before 10 years are up, do you also get hit with the back taxes? 

Texas opted out of ObamaCare, there is no state income tax at all, and there are fewer regulations (as a whole) and far less "political correctness" to contend with than in New York State.  Texas also offers a logistically central location for national distribution -- Dallas is a primary air, rail, and truck hub, and Houston is the #1 international and #2 total cargo tonnage shipping hub in the U.S.

Ironically, START-UP NY does offer one unique opportunity.  For Texas companies wanting to initiate new startup ventures in New York, they've made it easier than ever.