3 ms·

CA in general makes absolutely no sense to start a business in. There are zero arguments for starting a business in CA. Oregon, Washington, Texas, Colorado, etc

CA in general makes absolutely no sense to start a business in. There are zero arguments for starting a business in CA. Oregon, Washington, Texas, Colorado, etc. are all objectively better choices. Even if you're interested in raising money from SV investors you're far better off locating in Seattle, Denver, Portland, Austin, etc.

morogop 9y ago
One argument: SF and SV have more technologists, making it easy to hire particularly if you need to obtain specialized skills. There are more, but that one us sufficient to falsify your claim.
knicholes 9y ago
You forgot the lovely deseret (#2!) of Salt Lake City! https://www.cnbc.com/2017/07/21/the-top-15-cities-in-us-to-start-a-business-in-2017.html https://www.cnbc.com/2017/07/21/the-top-15-cities-in-us-to-s...
caust1c 9y ago
Except you know, California Labor Code section 2870... https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB&sectionNum=2870 https://leginfo.legislature.ca.gov/faces/codes_displaySectio... I'd be happy to know about other states which have similar laws.
Meekro 9y ago
I definitely agree with you that there are better states than California, but I recently moved my online company from California to Texas and discovered a really nasty surprise: Texas considers web hosting, server rental, SaaS, etc. to be services subject to sales tax [1]. Washington actually does as well, since you mentioned it. This will complicate your life in two ways: First, your internet company now has to enumerate subscribers in the same state as you and charge them sales tax. Your competitors, located in friendlier territories, can undercut you by not having to do this. Second, any payments you make to a SaaS/hosting vendor are now subject to use tax. Do you pay AWS for hosting every month? Get ready to cough up ~6% of that for Texas' treasury. If you're running the kind of business where your hosting bill will grow proportionally to your revenue, this amounts to a tax on revenue. In my case, it wildly exceeds anything California ever charged me in income tax. [1] https://blog.taxjar.com/saas-sales-tax/ https://blog.taxjar.com/saas-sales-tax/
- lenjaffe 9y ago
  > this amounts to a tax on revenue. Corporations wanted to be people. People pay income taxes on their revenue, not their profits.
  - 20after4 9y ago
    What about deductions?
geofft 9y ago
"I have social connections and support structures in California" sounds like a pretty good reason to me. Starting a business, paying extra taxes, and being willing to stick with it for the long term sounds better than being lonely and giving up 6 months in or deciding not to start it at all.

morogop 9y ago

One argument: SF and SV have more technologists, making it easy to hire particularly if you need to obtain specialized skills. There are more, but that one us sufficient to falsify your claim.

knicholes 9y ago

You forgot the lovely deseret (#2!) of Salt Lake City! https://www.cnbc.com/2017/07/21/the-top-15-cities-in-us-to-start-a-business-in-2017.html https://www.cnbc.com/2017/07/21/the-top-15-cities-in-us-to-s...

caust1c 9y ago

Except you know, California Labor Code section 2870... https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB&sectionNum=2870 https://leginfo.legislature.ca.gov/faces/codes_displaySectio... I'd be happy to know about other states which have similar laws.

Meekro 9y ago

I definitely agree with you that there are better states than California, but I recently moved my online company from California to Texas and discovered a really nasty surprise: Texas considers web hosting, server rental, SaaS, etc. to be services subject to sales tax [1]. Washington actually does as well, since you mentioned it. This will complicate your life in two ways: First, your internet company now has to enumerate subscribers in the same state as you and charge them sales tax. Your competitors, located in friendlier territories, can undercut you by not having to do this. Second, any payments you make to a SaaS/hosting vendor are now subject to use tax. Do you pay AWS for hosting every month? Get ready to cough up ~6% of that for Texas' treasury. If you're running the kind of business where your hosting bill will grow proportionally to your revenue, this amounts to a tax on revenue. In my case, it wildly exceeds anything California ever charged me in income tax. [1] https://blog.taxjar.com/saas-sales-tax/ https://blog.taxjar.com/saas-sales-tax/

lenjaffe 9y ago
> this amounts to a tax on revenue. Corporations wanted to be people. People pay income taxes on their revenue, not their profits.
- 20after4 9y ago
  What about deductions?

geofft 9y ago

"I have social connections and support structures in California" sounds like a pretty good reason to me. Starting a business, paying extra taxes, and being willing to stick with it for the long term sounds better than being lonely and giving up 6 months in or deciding not to start it at all.