Business owners across the country face tough decisions associated with where to locate their facilities, especially given the great variability in taxation from one locality to another. Obtaining information from all across a state can lead to countless hours on the phone without answers. The process gets no easier after this initial decision, as acquiring permits and licenses in most states is a long and tedious process as well. These are just some of the many soft, or indirect, costs that businesses face. These costs can also include supply chain costs, installation, labor, customer acquisition, permitting, inspection, interconnection, subsidy applications, and system design costs. For some manufacturing firms, soft costs can total up to 600 percent of the cost of labor, a huge barrier for new businesses.
Reducing red tape and streamlining processes has been identified as a top priority by leaders across the nation. Policymakers can reduce the soft costs of doing business in their states by developing a streamlined permitting website. New York City has reduced soft costs by developing seamless, hassle-free online platforms that combine local, state, and federal permitting requirements for businesses. The NYC Business Express Wizard is a free, online application that combines city-, state-, and federal-level permits, regulations, and licenses for specific businesses. Businesses can even track the status of permits and pay fees.
Each state can expand on the NYC Business Express Wizard model by creating an innovative platform to help business owners decide which state location is right for their company. The website could link to a Turbo Tax-like portal that walks business owners through permitting and regulatory requirements, allows owners to compare local tax rates and key statistics, and lets business owners explore local incentives and programs. If it is easy to compare local business environments side by side, cities could compete to be the best place to do business in the state. Statewide leaders could appeal to foundations in the state to fund the development of such a site.