8 Reasons Why Companies Are Moving to Texas

There have been a lot of news stories over the past few years about companies moving to Texas. This includes big names like Tesla, Oracle, and Hewlett Packard. In fact, Texas leads the nation in attracting business relocations from other states. People and companies are moving here from all over the country and across the world, but a lot of them are coming from California. Why are they moving here? Let’s take a look at eight reasons.

Big Population Growth

Over the past fifteen years, Texas has grown more in terms of population than any other state in the country. That not only means more potential customers for your business. It also means the talent pool of potential employees is growing faster here than anywhere else. This is a crucial factor in an economy full of businesses that are having a hard time finding workers. If you can’t hire, you can’t grow.

A Central Location

For many decades, CEOs of large companies had the idea that their headquarters had to be on one coast or another. Recently, some executives have touted the advantages of locating closer to the center of the country. This has advantages for production and distribution, as it’s easier to get your goods to anywhere in the continent, but it also reduces the commuting grind of executives who previously spent a lot of time (and money) flying from one coast to another.

Tech Boom

With so many great colleges and universities in the state, Texas became recognized for having a well-educated labor pool. This, combined with Texas’s significant aerospace sector (NASA has several important facilities here) helped Texas build a reputation as a great place for technology companies to develop a hub or headquarters. Austin has attracted so many technology businesses from California at such a rapid pace that it’s being called the new Silicon Valley. Major employers include Oracle, Apple, Samsung, Dell, and Microsoft.

Cost of Living

According to Zillow, the average value of a home in California is $745,200. The average home value in Texas is $282,726. That’s only 38% of the California home price. When California homeowners see numbers like this, you can see why they’re tempted to sell their home and buy one in Texas. The savings are gigantic. Rent costs show a similar disparity. Here are the latest rent averages according to Realtor.com for major metro areas in:


$2982 – Los Angeles

$2618 – Riverside-San Bernardino-Ontario, CA

$2064 – Sacramento / Roseville / Arden-Arcade

$3025 – San Diego / Carlsbad

$2975 – San Francisco / Oakland / Hayward

$3062 – San Jose / Sunnyvale / Santa Clara


$1769 – Austin / Round Rock

$1615 – Dallas / Fort Worth / Arlington

$1399 – Houston The Woodlands Sugar Land

$1377 – San Antonio New Braunfels

Since there are other factors to cost of living besides housing, let’s zoom out a little. NerdWallet has an online calculator that lets you compare the cost of living between two cities. Since many workers in the tech field are moving from San Francisco to Austin, Texas, let’s compare the living costs for those two cities.

If you’re making $100,000 before taxes in San Francisco, you’ll only have to make $50,525 in Austin in order to maintain the same standard of living. Housing costs are 71% lower, transportation costs are 34% lower, food costs are 27% lower, entertainment costs are 24% lower, and health care costs are 16% lower in Austin compared to San Francisco. Wow! The webpage also has data to compare schools, and found that public schools in Austin have the same average score as schools in San Francisco according to GreatSchools.com.

Now consider all this as a business owner. Due to cheaper living, your employees in Texas won’t need the high salaries they need to live in California. On top of all that, commercial property costs and rents are much lower in Texas.

Quality of Life

Another factor attracting businesses to Texas is the same thing attracting residents. It’s just a great state. Whether you love concerts, fine art, parks, zoos, festivals, water sports, hiking, biking, cooking, history, you name it, Texas has a lot to offer. The summers can be hot but the winters are milder than most of the country. With so many national league sports franchises playing in state-of-the-art arenas and stadiums, many sports fans consider Texas a better state for professional sports than California.

Business Taxes

California has a corporate income tax of 8.84%. Texas doesn’t have a business tax, but does have a tax on gross receipts. This can be very complicated to calculate and depends on a number of factors, but on average it’s a much smaller burden than the California corporate tax.

Personal Taxes

One factor of cost of living that was left out of NerdWallet’s cost of living calculator is taxes. It’s well-known that Texas has no state income tax. Californians pay up to 13.3% in state income tax. They also pay between 7.25% and 10% in sales tax. Texas sales tax rates range from 6.25% to 8.25%.

One small advantage for California is that the average effective property tax rate is only 0.72%, which is among the lowest in the country. The Texas property tax is 1.9%. But recall that property is significantly cheaper in Texas, negating this California advantage.

According to a USA Today analysis, Californians on average pay around 10.3% of their income to state and local taxes. In Texas, that’s only 8.7%.

Top Ratings for Business

Every year, WalletHub analyzes every state “across 28 key indicators of startup success to determine the most fertile grounds in which to launch and grow an enterprise.” They call this report “Best & Worst States to Start a Business.” California is number 3. Who’s at number 1? Texas.

For 17 years in a row, Texas has topped Chief Executive’s Best and Worst States for Business list.

Texas also won the Governor’s Cup for the most new and expanded corporate facility projects in the nation—for a record-breaking 9th year in a row.

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