Index score: 40.24

Alabama has the lowest property taxes in the nation, as well as relatively low corporate income taxes, no estate or inheritance taxes, and light health-insurance regulations. "It's a pro-business state," says Kerrigan. However, education quality is a concern for small businesses thinking of relocating there, she says. "Is there a brain drain?" she asks. "One of the challenges is keeping younger talent within the state once they've gone to college, and trying to keep them as long-term residents."