Bringing Your Business To Minneapolis
3 Benefits Of Bringing Your Business To Minneapolis
Minneapolis has become one of the best cities in the country to start a new business. It’s the largest city in the state of Minnesota and it’s located right next to Saint Paul, the state’s capital, and another important business hub. Each year, we see a boom in local residents and local businesses. This trend will no doubt continue upward until the city can compete with industry giants like Austin, TX and San Francisco, CA.
But what makes Minneapolis such a great place to do business? Why should you consider bringing your business and your ideas to this growing city? Here are three major benefits of bringing your business to Minneapolis.
1. Single Sale Apportionment
Traditionally, a company that makes goods in one state and sells them in another, they pay taxes in each state based on a portion of the profits. An equal amount of weight is given to the property, sales, and payroll values. This is known as the three-factor formula.
Minneapolis has a single sale apportionment formula rather than a three-factor formula. This formula removes the weight from property and payroll. Instead, the portion of taxes that the company has to pay in any state is based entirely on the portion of sales that take place in that state.
Who does this help? Any business designed to operate as a headquarters or a manufacturing plant that focuses on creating sales around the country would benefit. For example, a company headquarters that made no actual sales in Minneapolis, but sold products in other states, would enjoy significantly reduced corporate taxes.
There are many other ways you can lower corporate taxes in Minneapolis, as there is no throwback rule. This prevents non-taxable sales in other states from being sent back to Minnesota for tax purposes. By not enforcing this rule it is possible to lower your net taxable income.
Finally, the city and state have enacted a number of various credits that can be used to reduce business taxes. These include a small business investment credit, an R&D credit, and a historic structure rehabilitation credit.
2. A Haven For Fortune 500 Companies
There are 16 Fortune 500 headquarters located in the Minneapolis and Saint Paul region. That’s more per capita than any other place in the world. Such a high concentration of Fortune 500 companies is surprisingly good for business and good for the population.
The workforce in the city strives to further their education and remain competitive in the market, leading to more than 40 percent of the population having obtained at least a Bachelor’s degree. This is good news if you’re interested in opening a business that relies on an educated and hardworking employee-base.
Each of these companies has a significant impact on the industry sectors and they are all expected to grow substantially over the next five years. This is a great opportunity to interject your business into the mix. You have an opportunity to grow alongside some of the biggest companies in the world and to enjoy the networking opportunities that presents.
3. Cheaper Energy
Minneapolis has one of the lowest industrial energy rates in the country. It’s one of the ways they are able to compete with other major business hubs and continue to attract new companies. States like California and Massachusetts have an average industrial electricity price above 13 cents per kWh. Minnesota remains at a comfortable 7 cents per kWh.
But that’s the only way they help businesses cut energy costs. Electricity, water, and gas that a company uses for industrial or agricultural production are exempt from sales tax. The same applies to electricity that is used by a data center. If your company falls into either of these markets, then you can expect large savings on an annual basis.
Minnesota also provides affordable natural gas and affordable water. The average cost of natural gas in 2018 was around $4 per 1000 cubic feet. Most states are above $5 and some states with major business hubs cost twice that.
Minneapolis is located along the Mississippi river and certainly has no problem obtaining water. They have access to significant amounts of groundwater and surface water, which allows the city to remain in control of their water supply. Because of this, they have some of the lowest costs for water in the state. In 2018, they were listed as 40 percent cheaper than the national average. That percentage has likely only increased.
Bring Your Business To Minneapolis
Today, when we see Minneapolis in the news, it tends to involve riots and protests. These riots resulted in some major damage throughout the region. Now is a time to rebuild. To bring great businesses and great minds to the city. It is full of opportunity and the government has put a lot of effort into making it more affordable for new business owners. Energy is cheaper, taxes are lowered, and the local workforce is truly impressive.