Illinois Startup Costs Ranked Fifth Nationally
New business owners face higher expenses in Illinois compared to all neighboring states.
Updated on Oct. 6, 2026 in Openings & Closings
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Bridge Point Business Brokers identified Illinois as the fifth most expensive state for new businesses out of 48 states reviewed. The ranking reflects significant overhead from corporate taxes and commercial rent.
Why it matters
Operating costs in the state currently outpace surrounding neighbors, potentially creating a competitive disadvantage for new entrants. Higher fixed tax and real estate expenses require operators to sharpen their initial capital planning.
Illinois businesses face a 9.5 percent corporate tax rate and an 8.9 percent sales tax rate, alongside average commercial rents of $36.80 per square foot. These figures placed the state fifth in total startup costs among 48 states surveyed.
The players
Bridge Point Business Brokers
A brokerage firm that evaluates business operating environments and startup cost metrics across the United States.
The details
The ranking analyzed nine distinct cost factors to determine the financial burden of launching a business in each state. High corporate and sales tax rates combined with commercial real estate pricing currently serve as the primary drivers behind Illinois' high position. Prospective owners must weigh these fixed overhead costs against potential market access when choosing a location for a new venture.
Timeline
Bridge Point Business Brokers released the ranking in October 2026.
Market Landscape
This ranking aligns with broader documented trends regarding state-level tax and regulatory climates that influence capital allocation. It sits in a similar analytical space to the Tax Foundation's State Business Tax Climate Index by quantifying the overhead costs that dictate where entrepreneurs launch.
Operators planning a launch in Illinois should build a 9.5 percent corporate tax liability into their early financial models to account for the state's specific cost structure. When reviewing site options, factor the $36.80 per square foot average rent as a baseline benchmark against more affordable neighboring states.
The takeaway
The high cost of entry in Illinois necessitates rigorous site-selection analysis that accounts for the state's specific tax and rent tiers. Keep a close watch on your tax-projections to ensure your initial capital runway covers these higher fixed expenses compared to your regional peers.
Further reading
For more on the state's business environment, read our Openings & Closings section.
Source note: This article includes information reported by Decatur Radio.
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Do high state business costs discourage local entrepreneurs from launching new ventures in your area?
