Illinois Ranked Fifth Most Expensive State for Startups

A new industry report shows Illinois has higher business startup costs than all of its neighboring states.

Updated on Oct. 6, 2026 in Openings & Closings

Isometric editorial illustration of simple warehouse and office buildings in muted earth tones, representing business cost infrastructure in Illinois. — Bridge Point Business Brokers ranked Illinois the fifth most expensive state for startups, driven by high corporate taxes and commercial rent costs. AI Illustration. Upload story photo >

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Do high state business costs discourage local entrepreneurs from launching new ventures in your area?

Bridge Point Business Brokers has identified Illinois as the fifth most expensive state for launching a new business. The analysis covered 48 states, finding that Illinois carries higher costs than its immediate neighbors.

Why it matters

High startup expenses can discourage entrepreneurship and limit new business growth in the region. Corporate taxes, sales tax rates, and commercial rent are the primary factors driving Illinois up in these rankings.

Illinois maintains a 9.5 percent corporate tax rate and an 8.9 percent sales tax rate. Additionally, commercial rent in the state averages $36.80 per square foot.

The players

Bridge Point Business Brokers

This organization specializes in professional business brokerage services and market analysis for entrepreneurs.

The details

The ranking relied on nine distinct business cost factors to evaluate the economic environment for new ventures. Illinois now sits as an outlier among its neighbors, as Wisconsin, Iowa, Missouri, Indiana, and Kentucky all recorded significantly lower startup costs.

Bridge Point Business Brokers released the ranking in October 2026.

Market Landscape

This report highlights a divergence in regional competitiveness, suggesting that Illinois faces stiff challenges when vying for new business investment against lower-cost neighbors. The data suggests an ongoing trend where higher state tax burdens and overhead costs shift regional capital flow.

Small business owners and entrepreneurs in Illinois may face tighter profit margins and higher overhead than their counterparts in bordering states. These tax and rent figures directly impact the capital required for new ventures across the state.

The takeaway

Entrepreneurs considering a move to Illinois should account for the higher operational overhead compared to neighboring states. Conducting a location-specific cost analysis remains essential for businesses looking to optimize their tax and rental liabilities.