Best and Worst States for Business

Minnesota ranks in our index as one of the states where workers are the most likely to be healthy and happy. The state ranks seventh overall in United Health Foundation’s health rankings in 2019, which is likely related to the high health insurance coverage in the state. Just 4.4% of state residents lack health insurance, the fifth smallest share among states and less than half the national share of 8.9%.

Businesses and workers alike in South Dakota benefit from the state’s low cost of living. Goods and services in the state are about 12% less expensive than they are nationwide, on average.

The business climate in Texas ranks better than that of most states due largely to pro-business regulations. A so-called right-to-work state, Texas has a lower union membership rate than all but three other states. Additionally, the Texas tax code is more business friendly than that of most other states, according to the Tax Foundation.

According to the Tax Foundation’s 2020 State Business Tax Climate Index, Montana has the fifth most favorable tax climate for businesses. The state also ranks relatively well in categories like infrastructure and quality of life. However, the state ranks below average in some measures of technology and innovation, with relatively little venture capital investment in the state, even after adjusting for the state’s small population.

According to the Tax Foundation, Florida has one of the most business friendly tax policies of any state. Employers also benefit from having more control over their workforce. Florida is a right-to-work state, and just 5.6% of the labor force belongs to unions, well below the comparable national share of 10.6%.