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The Corporate Migration to Texas

Travis Boothe • 11/30/2020
Corporate relocations and migrations to Texas have been a trend that many hear about, but why are they happening? What are the benefits of making such a large and sometimes costly decision to relocate a business and employees halfway across the country? Other than Texans’ friendly and welcoming demeanor, there are a number of other significant drivers. Below is a comparison of the 10 largest metropolitan areas in the U.S. (sorted largest to smallest).

Taxes
Texas posts a combined corporate tax rate of 21% percent, which is tied for the lowest tax rate of the 50 states. The lower tax rate can yield additional corporate profits of 5-7% compared to some of Texas’ competitors.

Texas taxes 

Source: Tax Foundation

Affordability
Access to affordable housing and quality schools is a major influencer for companies and their employees. Compensation paid to employees is many times directly correlated with cost of living required in the respective area. Home values are one of the leading indicators when determining a metropolitan area cost of living.

Texas home values 

Source: Zillow

Accessibility
Travel and accessibility is a large consideration for executives and salespeople. Texas boasts a centralized location to both the East and West coasts as well as a large international airport (DFW). Below is the total passenger traffic for the largest metropolitan areas in 2019.

Passenger traffic 

Source: FAA

Real Estate
Cost of doing business is another major consideration for most companies. Real estate is a large component of any given companies overhead. Below is the average cost per square foot for office space in the respective metropolitan areas.

Asking rents 

Source: Cushman & Wakefield

Final Results
Texas consistently ranks amongst the top of all categories that companies evaluate when deciding where to locate their business. These are a few of the myriad of reasons that support Texas’ pro-business climate which will further accelerate the corporate migration to the Lone Star State!

Final rank