The 17th annual Kosmont-Rose Institute Cost of Doing Business Survey has been released by Claremont McKenna College’s Rose Institute of State & Local Government and the rankings determine which cities in California, as well as the nation, are the most expensive for doing business. The rankings were based on business fees and a variety of tax rates. Larry Kosmont, President and CEO of Kosmont Companies, which partnered on the study, commented that “California puts its own cities in a difficult spot. If a municipality succeeds in attracting a new or expanding firm, that new employer is inevitably squeezed by increasing local fees and the underlying cost of the state’s high tax schedule. The truth is, companies want to be in California. But somewhere a CEO is pondering, ‘how small an office in California can I get away with and still service that market?’ The sales office then goes up in LA or the Bay Area, but the bulk of jobs and back office functions end up in Tennessee or Texas.”
The most expensive cities for business in CA are ranked as follows:
- Beverly Hills
- Culver City
- Los Angeles
- San Bernardino
- San Francisco
- Santa Monica
The least expensive cities for business in CA are as follows:
- Apple Valley
- Costa Mesa
- Dos Palos
- Sutter Creek
- Unincorporated El Dorado County
- Unincorporated Lake County
Other highlights from the study include:
- California remains an expensive state in which to do business, even after the state sales tax rate dropped by 1% after July 1, 2011.
- Los Angeles County and the Bay Area remain some of the most expensive areas in the state, while San Diego is one of the most affordable for business.
- All of the least expensive cities are located west of the Mississippi River, with five cities in Texas and eight in Washington.
- Seventeen of the twenty least expensive cities are located in states that do not impose income tax, and two are located in states that do not impose sales tax.