NJ Chamber of Commerce are calling for a “bold, pro-growth reform” that includes reducing red tape and incentivizing emerging industries like AI and clean energy
the staff of the Ridgewood blog
Trenton NJ, For nearly a decade, New Jersey has prided itself on a highly educated workforce and a prime location between New York and Philly. But according to a bombshell study released this week, those perks may no longer be enough to offset the skyrocketing costs of doing business.
The WalletHub 2026 “Best & Worst States to Start a Business” report has officially ranked New Jersey 46th in the nation—placing it in the bottom five for startup success.
The Reality Check: Why New Jersey is Struggling
While New Jersey actually ranks #8 in the country for “Access to Resources” (thanks to our top-tier universities and venture capital availability), the state is being crushed by a single, overwhelming factor: Cost.
According to the 2026 data, New Jersey ranks dead last (#50) for business costs. From the highest corporate tax rates in the nation to record-breaking office rents, the “barrier to entry” for a new entrepreneur in the Garden State has never been higher.
The “Bottom Five” for 2026:
- Rhode Island (#50)3
- Maryland (#49)4
- Hawaii (#48)5
- Connecticut (#47)6
- New Jersey (#46)
The “Murphy Legacy” Under Scrutiny
As Governor Phil Murphy’s eight-year tenure comes to a close, critics and business advocates are pointing to the state’s regulatory environment as a major hurdle.
“New Jersey is a notoriously high-cost, high-burden state to run a business,” says the NJBIA.7 “While we boast world-class assets, we aren’t leveraging them because our policy environment isn’t keeping pace with the modern economy.”
Key Economic Stumbling Blocks in 2026:
- Nation-Leading Corporate Taxes: New Jersey maintains the highest top marginal corporate tax rate in the U.S. at 11.5%.8
- Labor Costs: The state’s minimum wage has risen to $15.92/hour, which—combined with generous unemployment insurance and paid leave mandates—has made hiring a massive expense for small startups.9
- Energy & Infrastructure: Electricity costs and aging infrastructure continue to pass “hidden” expenses down to business owners.10
By The Numbers: New Jersey’s 2026 Business Climate
| Category | National Rank |
| Overall Rank | 46th |
| Access to Resources | 8th |
| Business Costs | 50th |
| Labor Costs | 48th |
| Office Affordability | 45th |
Is There a Path Forward?
Despite the grim rankings, there is a glimmer of hope on the horizon. Incoming Governor Mikie Sherrill has already signaled that “affordability” will be the cornerstone of her administration’s transition plan. Business groups like the NJ Chamber of Commerce are calling for a “bold, pro-growth reform” that includes reducing red tape and incentivizing emerging industries like AI and clean energy.11
For now, however, the data is clear: if you’re looking to launch a startup in 2026, the “best” states are found elsewhere—with Florida, Utah, and Texas leading the pack as the most business-friendly environments in America.
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Being a business owner, I have the unfortunate need to deal continuously with the state’s Treasury Department, primarily sales tax-related issues. I can never reach anyone; they do not (only occasionally) answer emails, and they are generally terrible at it. I’m glad that Murphy is gone, and I’m hoping, but not expecting, things to get better.
Still has not seen a dentist.
Morton Downey Jr wants his choppers back