The list, compiled by GoodApril, a tax-planning company and startup in its own right, compares the seven best startup regions in the nation based on measures that matter to entrepreneurs. It looks at median tech worker earnings, max personal income tax, housing costs, property tax and the price of office digs.
San Francisco's high costs and taxes push it to last on the list, despite its proximity to Silicon Valley, according to GoodApril, which happen to be based in SF.
States with no state income tax led to higher rankings on the list, moving up Florida, Nevada, Texas and Washington. California, on the other hand, is become a less desirable place to start a business because of mountain taxes and increasing costs.
"Recent tax changes, increases in office and housing costs, and stratospheric salary expectations have all played a role in making it more expensive to start a business in San Francisco or the Silicon Valley," GoodApril Co-Founder Mitchell Fox writes on the company's tax tips blog. "Will those increases push businesses and entrepreneurs to pull the plug and relocate to other cities with a lower more favorable tax environments and lower cost of living? Where will entrepreneurs go?"
The question about California isn't whether or not there will be an exodus, but whether the state stay competitive with other, cheaper economic regions, Fox says.
"It may take Las Vegas or Austin 25 years to challenge northern California as an incubator of new technology, but they are working on it," he writes. "Zero state income tax gives them a big advantage."
Here's a look at the top startup cities by cost and taxes:
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(Image credit: GoodApril)