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Taxes: No personal income tax, but a gross-receipts tax on all business income
Best Places to Live and Launch: Bellevue (No. 1), Bellingham (No. 27), Olympia (No. 40), Spokane (No. 77)

Home of Microsoft, Amazon and Boeing, Washington is a high-tech state. Primary industries include software development, biotech, aviation and electronics. The state also has a robust agricultural environment: Washington is the No. 1 U.S. producer of apples, pears, sweet cherries and red raspberries. While residents enjoy the benefits of paying no income tax, businesses don't get off so easily: The state has some of the highest excise taxes in the nation on goods such as gasoline, cigarettes and alcohol; gasoline and diesel are taxed 34 cents per gallon.

On average, residents of Bellevue earn almost twice the U.S. median income; the city is rapidly growing and features a number of software development companies as well as a robust service sector. Picturesque Bellingham offers leisure activities like hiking and boating, plus jobs in aviation manufacturing, oil refining, health care and telecommunications. The state capital, Olympia, features a marine port and a commercial airport; the city also has a healthy professional-services sector and growing life-sciences industry. Spokane, Washington's second-largest city, features a diverse blend of high-tech fields like biosciences as well as agriculture, forestry and manufacturing. The Spokane River bisects the city; residents and visitors enjoy outdoor recreation such as kayaking, rock climbing and hiking through the region's nearby mountains.

NEXT: New Hampshire

Last updated March 27 2008: 10:09 AM ET