Business rankings are in, and guess what? The Southern states are shining bright once again.

The Top States for Doing Business know a thing or two about creating an attractive business environment. The top states closely manage their taxes and incentive programs, keep their labor force fresh, trained and accessible and maintain infrastructure like energy and water. They’re also responsive to business needs and to changes in climate.

Area Development’s Top States for Doing Business results are derived from a detailed survey of expert consultants, and shed light on what makes a state a great place for businesses to thrive. We surveyed smart individuals across a range of 14 key questions, including overall cost of business, to tax incentives, availability of energy and water, climate resilience, workforce and site readiness. Join us as we celebrate the states that are leading the way and analyze why they are making such a big difference in the business world.

For the eleventh consecutive year, Georgia claims the top spot, a testament to its robust pro-business environment. The Peach State›s consistent performance across various categories makes it a perennial favorite for businesses looking to expand or relocate. Georgia›s ability to sustain its leadership position speaks volumes about its strategic investments in infrastructure, education, and policy frameworks that foster business growth and economic resilience.

A key factor in Georgia’s sustained success is its nationally acclaimed workforce development program, Georgia Quick Start. Offered through the Technical College System of Georgia, Quick Start provides customized training for new and expanding businesses, particularly in manufacturing, biotechnology, and information technology. This program has been pivotal in attracting companies that require tech-savvy workers with specific skills, bolstering the state’s competitive labor market.

Georgia’s logistics and infrastructure capabilities are another major contributor to its top ranking. The state is home to the world’s busiest airport, Hartsfield-Jackson Atlanta International Airport, and the fastest-growing container port in the nation, the Port of Savannah. These assets, combined with a robust road and rail network, enable efficient movement of people and goods across the state and globally. This strategic advantage supports a wide range of industries and enhances Georgia’s appeal as a prime business location.

Additionally, Georgia’s favorable cost of doing business, characterized by competitive tax rates and incentives, makes it an attractive destination for companies. The state’s business-friendly policies, coupled with its commitment to maintaining a low operational cost environment, create an ideal climate for business growth and investment.

Overall Cost of Doing Business

The overall cost of doing business is a critical factor for companies when choosing a location. States that offer a favorable cost environment, including low taxes, affordable labor, and competitive utility rates, are highly attractive to businesses.

Tennessee ranks first in the overall cost of doing business, thanks to its low tax burden, right-to-work status, and reasonable utility costs. The state’s fiscal responsibility and business-friendly policies create an environment where companies can thrive with lower operational expenses. Tennessee’s commitment to maintaining a low cost of doing business makes it an attractive destination for a wide range of industries. Tennessee has made significant strides in enhancing its business environment through recent policy changes. The Tennessee Works Tax Act, effective July 1, 2024, includes several tax reforms aimed at reducing the tax burden on businesses. Key changes include transitioning to a single sales factor apportionment method, which benefits businesses with significant out-of-state sales, and the introduction of a $50,000 standard excise tax deduction.

Additionally, Tennessee has expanded its property tax exemptions and increased the carryforward period for tax credits, further reducing the cost of doing business in the state. These changes, combined with the state’s commitment to maintaining low utility costs and a favorable regulatory environment, reinforce Tennessee’s position as a top state for business.

Access to Qualified Labor

Attracting and retaining skilled labor is a cornerstone of any state’s economic success. In 2024, North Carolina leads the pack in this critical category, offering a rich talent pool and exceptional educational institutions. The state’s commitment to workforce development is exemplified by its numerous educational initiatives and a strong network of universities and community colleges.

Georgia, Texas, and Indiana also rank highly in this category, benefiting from strong educational systems and attractive living conditions that draw talented individuals. Georgia’s workforce initiatives, such as the Georgia Quick Start program, provide businesses with access to a well-educated and skilled labor pool, ready to meet the demands of today’s competitive market. Texas, with its vast educational system and workforce development programs, ensures that businesses can find the talent they need.

Availability of Sites

Finding the right site for a new project can be a daunting task, but South Carolina makes it easier with its well-established LocateSC program. This initiative ensures that businesses can find ready-to-develop sites quickly, with all the necessary due diligence completed in advance. South Carolina’s strategic investments in site readiness have paid off, making it a top destination for businesses looking to expand.

Tennessee and Texas follow closely in this category, with comprehensive site-readiness programs that reduce the time and cost associated with new projects. Tennessee’s Certified Sites program offers a roster of pre-vetted sites, while Texas’s extensive land resources and robust infrastructure make it an ideal location for businesses in various industries.

Business Incentives Programs

Business incentives play a crucial role in reducing startup and operational costs, and Georgia tops this category with a range of attractive incentives. The state offers tax credits for job creation, research and development, and investment in economically distressed areas. Additionally, Georgia provides sales tax exemptions for manufacturers and other businesses, further enhancing its appeal.

South Carolina, which ties with Georgia for the top spot, offers performance-based tax incentives that reward companies for job creation and investment. Tennessee follows closely, providing a variety of grants and tax credits to support business growth and development.

Climate Risk and Resilience

Managing climate risks and ensuring resilience is becoming increasingly important for businesses. Indiana leads this category, thanks to its proactive measures in mitigating climate risks and ensuring business continuity. Indiana has made significant strides in climate resilience through its Resilience Cohort program, which helps local governments assess and address their climate risks. The program, facilitated by Indiana University’s Environmental Resilience Institute (ERI), connects local governments to experts and resources, guiding them through climate vulnerability assessments and resilience planning. This initiative has enabled Indiana to enhance its infrastructure to cope with extreme weather events such as flooding and heatwaves, making it a reliable choice for businesses concerned about climate resilience.

In 2024, Indiana released its first comprehensive climate action plan, which includes measures to expand renewable energy, improve energy efficiency in buildings, and adopt electric vehicles. The plan aims to make the state more sustainable and resilient, although advocates believe there is potential for even more ambitious targets. Michigan scores highly in climate resilience due to its abundant freshwater resources and proactive water management policies. The state has focused on ensuring long-term water availability for businesses, which is crucial as water scarcity becomes a more pressing issue globally. Michigan’s commitment to sustainable water management includes significant investments in water infrastructure and policies aimed at protecting its vast freshwater resources from pollution and overuse.

Cooperative & Responsive State/Local Government

A cooperative and responsive government can make a significant difference in the ease of doing business. South Carolina leads in this category, known for its business-friendly policies and efficient governmental support for business initiatives. The state’s Coordinating Council for Economic Development works to streamline processes and provide support to businesses.

Tennessee and Georgia follow closely, reflecting their commitment to fostering a supportive business environment. Tennessee’s Economic and Community Development team and Georgia’s Department of Economic Development provide valuable assistance to businesses, helping them navigate regulatory processes and access resources.

Corporate Tax Structure

A favorable corporate tax structure can significantly impact a state’s attractiveness to businesses. Texas excels in this category, thanks to its absence of state income tax and competitive corporate tax rates. The state’s business-friendly tax environment makes it an attractive destination for companies of all sizes. North Carolina and Tennessee also offer competitive tax structures that enhance their appeal. North Carolina’s low corporate tax rate and tax incentives for job creation and investment make it an attractive destination for businesses. Tennessee’s competitive tax structure also supports business growth, with no state income tax on wages and salaries and low corporate tax rates, as mentioned in the Overall Cost of Doing Business analysis. The state offers various tax incentives to encourage business investment, including credits for job creation and R&D activities.

Favorable Property Tax Environment

A favorable property tax environment can significantly influence a state’s attractiveness to businesses. States that offer lower property taxes and beneficial policies can provide substantial savings for companies, making them more competitive and financially viable.

Alabama stands out in this category, offering some of the most favorable property tax rates in the country. Recently, Alabama implemented a significant policy change with the passage of House Bill 73 (HB73), which caps annual property tax assessment increases at 7% after reappraisals. This legislative move, signed into law by Governor Kay Ivey, aims to provide greater predictability and stability in property tax expenses for businesses. The cap helps protect businesses from sudden spikes in property taxes, making long-term planning more feasible and secure.

Tennessee also excels in providing a favorable property tax environment. The state’s low property tax rates complement its already attractive tax structure, which includes no state income tax on wages and salaries. Tennessee’s property tax incentives, such as abatements for new investments and redevelopment projects, further enhance its appeal. These incentives help reduce the initial costs of setting up operations and encourage long-term investments in the state. The state’s commitment to maintaining these favorable conditions continues to attract a diverse range of businesses.

Favorable Regulatory Environment
South Carolina leads the way with a regulatory environment that is both business-friendly and efficient, significantly contributing to its top ranking. The state has implemented streamlined processes designed to minimize bureaucratic hurdles and expedite business operations.

One standout initiative is the “Rapid Response” program, which prioritizes permit approvals for high-impact projects, ensuring that businesses can get up and running quickly. Additionally, South Carolina offers a comprehensive online portal that simplifies regulatory compliance and application processes.

These efforts not only reduce the time and costs associated with regulatory adherence but also create a welcoming atmosphere for business growth and investment.

Energy Availability & Costs

Reliable and affordable energy is a critical factor for many businesses, and Tennessee and Georgia lead the way in this category. Tennessee’s abundant hydropower resources contribute to lower energy costs, making it an attractive destination for energy-intensive industries. Georgia Power’s diverse energy mix and competitive rates provide businesses with reliable and cost-effective energy solutions.

South Carolina, North Carolina, and Louisiana also rank highly, benefiting from competitive industrial electricity rates and robust energy infrastructure.

Logistics & Infrastructure

Efficient logistics and robust infrastructure are essential for businesses involved in manufacturing and distribution. Texas maintains its top position in this category, thanks to its extensive transportation networks, including road, rail, and port infrastructure. The state’s strategic location and robust logistics capabilities support a wide range of industries. Texas has committed significant investments to its infrastructure, including a $142 billion plan for new roadway projects over the next decade, enhancing its already extensive network of public roads, state highways, and freight railways.

The Port of Houston, a major gateway for containerized cargo, and the Port of Corpus Christi, a significant hub for energy-related exports, are critical components of Texas’ logistics infrastructure. Additionally, Texas boasts the largest inland port along the U.S.-Mexico border, the Port of Laredo, which underscores its pivotal role in international trade.

The state’s robust infrastructure not only facilitates domestic distribution but also positions Texas as a central hub for global trade, with access to key markets in North America and beyond.

Texas’ logistics industry is further bolstered by its vibrant third-party logistics (3PL) market, which offers comprehensive services including transportation, warehousing, inventory management, and value-added services. The state’s emphasis on technological advancements in logistics, such as automation, data analytics, and supply chain visibility tools, enhances operational efficiency and reduces costs, making Texas a leader in logistics and infrastructure.

Overall, Texas’ strategic investments in its transportation networks, combined with its central location and advanced logistics capabilities, make it a top choice for businesses seeking efficient and reliable logistics solutions. The state’s commitment to maintaining and expanding its infrastructure ensures that it remains a competitive and attractive destination for industries reliant on robust logistics networks.

Georgia and Ohio are also strong contenders, with strategic locations and well-developed transportation networks. Georgia’s Port of Savannah and Hartsfield-Jackson Atlanta International Airport provide businesses with unparalleled access to domestic and international markets, while Ohio’s robust transportation network ensures seamless connectivity to major markets.

Workforce Training Programs

Effective workforce training programs are crucial for ensuring that businesses have access to skilled labor, which can significantly impact their productivity and competitiveness. States that excel in this category have invested heavily in customized training programs that meet the specific needs of businesses and industries. Leading the charge in workforce training is Georgia, thanks to its highly acclaimed Georgia Quick Start program. This initiative offers free, customized training for new and expanding businesses, tailoring programs to meet the specific needs of the companies. Quick Start has been a game-changer for Georgia, helping over a million employees develop the skills required for various industries, from manufacturing to information technology.

Virginia follows closely with its comprehensive workforce training initiatives, including the FastForward program and the Virginia Talent Accelerator Program. These programs provide short-term training courses that align with the needs of high-demand industries, ensuring that businesses have access to a pipeline of qualified workers. Virginia’s commitment to workforce development makes it a top contender in this category.

Alabama’s AIDT (Alabama Industrial Development Training) program is another standout, offering extensive services ranging from recruitment and screening to customized training and leadership development. AIDT’s focus on continuous improvement and innovation in training has made it a valuable asset for businesses in Alabama, helping to attract new investments and support existing industries.

Tennessee’s workforce training efforts are highlighted by its Drive to 55 initiative, which aims to equip 55% of Tennesseans with a college degree or certificate by 2025. The Tennessee Promise and Tennessee Reconnect programs provide tuition-free community and technical college education to high school graduates and adults, respectively. These initiatives ensure a steady supply of skilled workers to meet the demands of businesses in the state.

Site Readiness Programs
Site readiness programs are essential for reducing the time and cost associated with site selection and development. States that excel in this category offer pre-vetted sites that are ready for immediate development, making them highly attractive to businesses looking to expand or relocate.

Tennessee leads in site readiness with its comprehensive Certified Sites program. This initiative offers a range of pre-vetted sites across the state, from small parcels to large industrial megasites. The rigorous certification process ensures that these sites are ready for development, with all necessary due diligence completed. This reduces the time and cost for businesses, making Tennessee a top destination for new projects.

South Carolina’s LocateSC program is another top performer, offering a vast inventory of ready-to-develop sites. The program’s success is due to the state’s proactive approach in identifying and preparing sites for industrial use. The Palmetto Sites program further enhances the state’s attractiveness by providing detailed site assessments and ensuring that sites meet the stringent requirements of potential investors.

Ohio’s JobsOhio Site Inventory Program (JOSIP) is a key player in site readiness, offering a wide range of certified sites that are ready for immediate development. The program’s focus on reducing development timelines and costs has made Ohio a preferred location for businesses looking to expand quickly. The state’s strategic investments in site readiness have paid off, attracting numerous high-profile projects.

Kentucky’s Build-Ready program provides a streamlined path to development with pre-vetted sites that meet rigorous standards. The program’s emphasis on infrastructure and site preparation ensures that businesses can hit the ground running. Kentucky’s proactive approach to site readiness has made it a competitive choice for businesses seeking efficient and cost-effective development options.

Water Availability
Access to reliable water resources is critical for many industries, particularly those in manufacturing, agriculture, and technology sectors. Michigan ranks highly in this category, owing to its abundant freshwater resources and proactive water management policies. The state’s “MI Clean Water Plan” and recent investments in water infrastructure have significantly bolstered its water availability. These initiatives include upgrading aging infrastructure, removing lead service lines, and implementing advanced water treatment technologies. Michigan’s comprehensive approach ensures long-term water security for businesses, making it an attractive location for water-dependent industries.

Ohio also excels in water availability, with extensive freshwater resources from Lake Erie and the Ohio River. The state has invested in modernizing its water infrastructure and improving water management practices. Programs such as the Ohio BUILDS initiative focus on enhancing water quality and ensuring sustainable water supplies for industrial and commercial use. These efforts provide a reliable water source for businesses, reducing risks associated with water scarcity.

Recognizing Excellence in Specific Categories
While the overall rankings highlight the best states for doing business, it’s important to recognize the states that excel in specific categories. These states may not have topped the overall list but have demonstrated exceptional performance in areas critical to business success.

Minnesota excels in climate resilience and renewable energy production, Minnesota offers a stable and sustainable environment for businesses. The state’s proactive climate policies and investments in infrastructure make it an ideal location for companies prioritizing sustainability.

Known for its abundant water resources and proactive water management policies, New York provides businesses with a reliable and sustainable water supply. The state’s investments in water infrastructure and its strategic location along the Great Lakes ensure that businesses have access to the water they need for their operations.

Illinois benefits from its location along the Great Lakes and the Mississippi River, providing businesses with ample water resources. The state’s comprehensive water management policies ensure the sustainable use of water, making it an ideal location for water-intensive industries. Illinois’s investments in water infrastructure, including treatment facilities and distribution networks, ensure that businesses have access to clean and reliable water.

The Badger State’s strategic focus on sustainability and climate resilience makes Wisconsin an attractive destination for businesses. The state’s robust renewable energy sector, supported by policies that encourage the use of clean energy, provides businesses with reliable and sustainable energy sources. Wisconsin’s investments in infrastructure to manage climate risks, such as flood control and stormwater management systems, enhance its appeal.

Demonstrating strong performance in climate resilience and innovation, Arizona has positioned itself as a hub for high-tech industries. The state’s focus on building a business-friendly environment through tax reforms and infrastructure investments has yielded positive results. Arizona’s proactive measures in managing climate risks and its investments in renewable energy make it a resilient and attractive location for businesses.

Final Thoughts
The diverse strengths of these states highlight the importance of evaluating multiple factors when choosing a business location. While overall rankings provide a snapshot of the top states for doing business, focusing on specific categories can reveal additional opportunities that align with a company’s unique needs and priorities.

As businesses seek locations that offer stability, resources, and a supportive environment, the states highlighted in the 2024 Top States for Doing Business survey provide valuable insights. These states have demonstrated their ability to create optimal conditions for growth and innovation, ensuring that businesses can thrive in an ever-evolving economic landscape.

Whether you are a business leader planning your next expansion, an entrepreneur seeking the best location for your startup, or a policymaker aiming to enhance your state’s business climate, the insights from this year’s rankings offer a comprehensive guide to the best environments for doing business in 2024.