Texas has emerged as the new leader in housing the most Fortune 500 companies, surpassing California for the first time. According to this year’s Fortune 500 list, Texas now boasts 57 corporate headquarters, edging past California’s 56. This marks a significant shift from just two years ago when California held the top spot. Texas has long been a hub for corporate giants such as Dell, Exxon, and AT&T. In recent years, influential figures like Elon Musk, Mark Cuban, Palantir co-founder Joe Lonsdale, and venture capitalist David Sacks have moved their business interests to Texas.
Texas Costs Drop, Housing Swings
Notably, Texas gained three new Fortune 500 company headquarters, boosting its total number to the highest since 2010. Among those joining the migration to Texas is Travis Kalanick, Uber’s co-founder and a San Francisco native, who relocated to Austin. He cited the looming threat of a California billionaire tax as a motivating factor for his move. In response to this notable achievement, Texas Governor Greg Abbott proudly stated, “Texas is the undisputed headquarters of headquarters.” He emphasized the state’s attractive business environment, regulatory stability, and skilled workforce as key reasons behind its appeal. “People and businesses are choosing Texas because Texas works,” Abbott added.
Austin Offers Affordable Rents Amid Growth
The allure of Texas is partly due to its lower operating costs, especially when compared to high-expense areas like San Francisco. In Texas, the cost of office space, warehouses, and land tends to be more affordable, particularly in fast-growing cities like Austin. This surge in demand has fueled a housing boom in Austin, followed by a market correction. As tech workers flocked to the city, developers rapidly constructed apartments, leading to a surplus and subsequently dropping the value of luxury condos.
Texas Tops Revenue as California Eyes Tax
The companies located in Texas are even pulling in a bigger profit, with the state earning $2.8 trillion in revenue, compared to California’s reported $2.7 trillion. New York comes in third with 53 companies and $2.2 trillion. For wealthy business owners, California’s impending billionaire’s tax poses an added threat. The California Billionaire Tax Act, which would target about 200 California residents with assets over $1 billion, would charge a one-time 5 percent tax on their net worth.
Texas Draws Residents With Tax Perks
The tax would be due in 2027, and taxpayers could spread payments over five years, with interest, according to the Legislative Analyst’s Office. Meanwhile, Texas has no state personal income tax, which attracts both executives and frugal employees. Texas is also one of the fastest-growing states in terms of population, adding over 391,000 new residents last year, according to the Census Bureau.
