CHICAGO (Aug. 12, 2025) – New analysis shows businesses are struggling to open and then stay in Illinois, with the tax climate likely to blame.

According to new research from the Illinois Policy Institute, businesses are moving to other states at triple the rate they did before the pandemic. In 2023, 218 businesses exited Illinois — the second-worst year in state history and the third-worst total in the country, behind New York and California.

Despite having the most business applications filed in the Midwest, only 5.6% of applicants in Illinois actually opened a businesses and became operational within 12 months: 9,645 in 2024. This lags the national average of 6.1%.

Institute experts point to high taxes, excessive regulation and massive government pension debt as barriers to businesses opening and remaining in Illinois.

“These businesses symbolize lost jobs, lost investment, shrinking futures and fewer opportunities for Illinois families,” said Bryce Hill, director of fiscal and economic analysis at the nonpartisan Illinois Policy Institute. “People want to open their businesses here but they’re getting stuck in the process. These same conditions are pushing already successful businesses in Illinois to other states. That should be noted by leaders: Illinois’ hostile tax environment hinders its success, especially when compared to states where businesses are heading.”

To read more about Illinois’ business outmigration, visit illin.is/ilbizmoves.

For bookings or interviews, contact media@illinoispolicy.org or (312) 607-4977.