Choosing the best state based on tax considerations oftentimes reduces tax bill by at least 5% of your net profits. Now, lets say you are making 2M per year. 5% = 100K, which is more than enough to hire another programmer!
In fact, the point of my comment is that the business could be located in a low tax jurisdiction, resulting in more funds flowing to the bottom line, while the owners and employees could be located somewhere they like, even a high tax jurisdiction if they wanted.
I'm bootstrapping in NYC, for which there are a multitude of taxes and other costs:
- Rent is insane, of course :)
- LLC Newspaper Publication requirement (why this exists is beyond me)
- Large sales taxes (although ST 121.3 ensures you are tax exempt on hardware)