Some states have passed laws that make it easier for people to obtain occupational licenses.Mike Harrington/Getty Starting a business might be easier in some states compared with others.In the past two years, several states passed laws lifting restrictions to entrepreneurship.For example, Missouri’s Right to Start Act gives tax breaks to startups.
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If you’re considering starting a business , like the 5.4 million Americans who did last year , the ease of the process varies depending on where you live.
Over the past couple years, some states have made entrepreneurship easier by passing legislation that lifted certain restrictions, enacted tax breaks for young companies, and banned red tape that can make it difficult for some to survive.
For example, state Rep.Travis Fitzwater of Missouri introduced the Right to Start Act last year to encourage entrepreneurship in the state with tax incentives and increased government contracting.
“The best way to incentivize new businesses is to remove barriers to start,” he told Insider months before the bill was signed into law.
“Startups are the ones that create jobs, not large businesses.”
Below is Insider’s list of states that passed recent legislation to benefit entrepreneurs.We will continue to update this list as new laws are signed.
Connecticut Bridgeport, Connecticut.
DenisTangneyJr/Getty Images Connecticut legalized cannabis for recreational use in 2021, opening up opportunities for consumer businesses.Licensed retailers can begin selling marijuana products to adults 21 and older beginning on January 10, 2023, according to the state’s Department of Consumer Protection.
California Sacramento, California.
Getty Images.In September, California passed a bill that eases restrictions and permit requirements for street vendors, particularly for small operators who can’t afford expensive fees.
The California Retail Food Code bill waives or reduces permit fees, helps businesses comply with health codes, and increases access to health-department-approved kitchens for food preparation and storage.It also places sidewalk food vendors in a different category from food trucks, lowering the requirements for code compliance and making the carts and equipment more affordable.
Missouri Kansas City, Missouri.Edwin Remsberg/Getty Images In 2021, Missouri passed the Right to Start Act , which outlines plans to make the state a better place for entrepreneurs to get their businesses up and running.
“The first five years are the most important” to a startup’s survival, Fitzwater said.
The bill requires the government to award 5% of all state contracts to startups that have been operating for less than five years, nullifies noncompete clauses in worker contracts, and establishes an office of entrepreneurship.
There are also several tax provisions for companies less than five years old.
Businesses created within the past tax year, beginning on January 1, are exempt from paying taxes on their first $250,000 of income and pay 4% on income afterward.Small businesses with less than $5,000 in revenue can defer filing their taxes for one year.
Missouri also passed legislation in 2020 that eased licensing restrictions .Professionals such as barbers, nail technicians, and real-estate agents no longer need to be a resident of the state to receive an occupational license as long as they have valid certification in another state.
Colorado Denver.Caleb Alvarado for Insider Businesses in Colorado can apply for the Employee Ownership Tax Credit to allow employee shareholding in exchange for a tax break.
The state covers half the cost of converting a company’s equity into stock-ownership plans, employee-ownership trusts, or worker cooperatives.
The tax provision, which is credited on a company’s state income tax, will continue through 2027.Massachusetts and Texas are considering similar legislation.
Additionally, in 2020, Colorado passed licensing legislation that allows professionals who have substantial work experience or credentials from another state to receive certification in Colorado without needing additional training.
Florida Sarasota, Florida.Suncoast Aerials In 2020, Florida became one of several states to reform licensing requirements with the Occupational Freedom and Opportunity Act .
Barbers and cosmetologists who move to Florida from another state may use their active out-of-state licenses.Home inspectors and electrical-system contractors can continue to work in the state if they have held a license for at least 10 years in another state.
This legislation also removed examination requirements for some professions, such as landscape architects, and reduced education and training hours to lower the cost to enter certain industries.
Other professions no longer need a license, including interior designers, hair braiders, hair wrappers, body wrappers, boxing announcers, and boxing timekeepers.
Mississippi Jackson, Mississippi.Denis Tangney Jr.In 2020, Mississippi passed the Military Family Freedom Act , which allows military members and their spouses to get their occupational licenses based on previous education and training they received out of state.
Ohio Cincinnati.Icon Sportswire/Getty Senate Bill 7 , which was signed into law in 2020, gives military members and spouses a temporary certification for six years if they have a valid out-of-state occupational license and have moved to Ohio for military duty.
Arizona Tucson, Arizona.
Sean Pavone/Shutterstock In 2019, Arizona became the first state to pass universal licensing legislation .The law allows professionals to receive a new license as long as they have valid certification in good standing in another state.This applies to barbers, chiropractors, contractors, cosmetologists, dentists, real-estate agents, and others.
Additionally, Arizona legalized recreational cannabis in 2020, ruling that adults 21 years or older could possess up to 1 ounce of the substance.This opens up opportunities for consumer businesses.
Utah Salt Lake City.
AaronP/Bauer-Griffin / Getty Images In 2020, Utah passed licensing legislation that allowed professionals to receive their occupational license as long as they had valid certification in good standing in another state.The law also removes a clause that required applicants to “be of good moral character” to practice as a cosmetologist, podiatrist, electrologist, esthetician, barber, nail technician, or pharmacist, among other occupations.
Idaho Boise, Idaho.Darwin Fan/Getty Images In 2020, Idaho passed licensing legislation that allowed professionals to receive their occupational licenses as long as they had valid certification in good standing in another state.
The law also requires that any disqualifying criminal offense be deemed “relevant” to bar an applicant from certification.
Iowa Des Moines, Iowa.Eddie Brady/Getty Images In 2020, Iowa passed licensing-reform legislation that allowed a professional to get licensed in the state if they met a requirement for work experience, rather than requiring additional education or training.The law removes licensing fees for low-income workers and omits restrictions for people with a criminal record that relates to their profession.
New Jersey Newark, New Jersey.Howard Kingsnorth New Jersey legalized cannabis for recreational use in 2020, opening up opportunities for consumer businesses in what’s expected to be one of the largest markets of legal cannabis in the nation.Recreational cannabis products incur a 6.65% sales tax.
Montana Billings, Montana.
peeterv Montana legalized cannabis for recreational use in 2020, but sales for adult use is limited to counties that voted in favor of Initiative 190 .
Businesses with preexisting medical-marijuana licenses are the first allowed to sell the substance at a consumer level, the local news station 3KRTV reported .In July 2023, new businesses can apply for licenses to sell recreational cannabis.
New Mexico Santa Fe, New Mexico.Shutterstock New Mexico legalized cannabis for recreational use in 2021, opening up opportunities for consumer businesses once sales begin in April.Marijuana sales will have an excise tax of 12%.
New York Albany, New York.Sean Pavone/Shutterstock New York passed the Marijuana Regulation and Taxation Act in 2020, which legalized cannabis for recreational use.
Once sales begin this year, the state is expected to be one of the largest markets of legal cannabis in the nation.
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