There are a lot of variables and expenses to starting a business in New Jersey. According to a recent CNBC ranking, New Jersey ranked as 41st in the country for its business friendliness. Last year, New Jersey was ranked 38. This ranking is based on a number of criteria including its corporate tax rate, business incentives and other business regulations.
Several factors caused the rating to slip this year. These factors included the fact that New Jersey has a high tax burden for businesses. Furthermore, the fact that industrial and office space is expensive to rent was also a factor in reducing the score. Finally, New Jersey’s high average wage also lowered the rating.
Many were surprised by the rating, considering the recent tax cuts by Governor Chris Christie and some deregulation. The Christie administration, in particular, is known for claiming to be business friendly and interested in partnerships with New Jersey businesses.
In this tough economic environment, new businesses need to be particularly careful in their planning. With the right planning and foresight, New Jersey’s businesses can use business formation issues to their advantage to avoid some financial burdens. With the right planning, New Jersey businesses can lower their tax burden — particularly through the use of the appropriate business entity. Furthermore, with skillful negotiation, businesses may be able to pay lower rents and wages. Finally, with the right help, businesses can quickly meet all governmental regulations to legally operate in the state.
Whether a business is a start-up company or is growing through a business acquisition, the appropriate business planning is an important part in the success of New Jersey’s businesses.
Source: The Star-Ledger, “CNBC ranking: New Jersey one of the most expensive states for businesses,” Jessica Calefati, July 13, 2013