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Taxes: No personal income tax, low business gross receipts tax (sole proprietors and general partnerships are exempt)
Best Places to Live and Launch: Georgetown (No. 2), Fort Worth (No. 9), San Antonio (No. 34), Stafford (No. 36)

Although petroleum refining is one of Texas' primary industries, the state's economy relies on a wide variety of fields, including manufacturing, agriculture and aerospace. Exxon and Citgo are headquartered in Texas, as are Dell, Texas Instruments, Raytheon and Mary Kay. Manufacturers produce clothing, chemical products, food, automobiles, computers and more.

Recently, the governor's office identified six industries in which Texas wants to promote future growth: advanced technologies and manufacturing, aerospace and defense, biotech and life sciences, IT and computers, oil refining and chemical products, and energy, including new energy sources such as wind. The government is cultivating these sectors by connecting businesses with federal and private grants, providing state funds for research, and increasing job training programs. Georgetown benefits from its proximity to Austin, and it boasts a high quality of life, with low crime and plenty of parks, lakes and golf courses. Fort Worth and San Antonio offer big-city environments and jobs in manufacturing, financial services and biotech. Houston suburb Stafford offers a wealth of high-tech opportunities; in addition, the town has no property tax.

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Last updated March 27 2008: 10:09 AM ET