North Dakota Is Third Best State for Business
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North Dakota Is Third Best State for Business

Yet again North Dakota is a top-five favorite in this year's America's Top States for Business. The state held strong for a second year in a row, taking the No. 3 spot, just two spots higher than its ranking in 2012. One of the main engines pushing the state higher in our rankings, and also nabbing it a No. 2 spot in our Economy category, is shale oil.

North Dakota's Bakken shale formation hit record oil production this April. Oil and gas also was the main reason why the state had the highest real GDP growth in America last year at 13.4 percent. An impressive rate when you consider the second-fast growing state last year was Texas at 4.08 percent.

 Aside from the economic powerhouse that is shale, agriculture is actually the largest industry in the state and is looking to do well. The latest report from the U.S. Department of Agriculture said that warmer temperatures across the state are advancing the state's crops.

The Rough Rider State saw an impressive leap in its Infrastructure and Transportation ranking. A near 93 percent jump from 2012—from 28th to second this year. It has the lowest unemployment rate in the nation at just 3.2 percent. Positive low numbers continue to trend in the state, the top corporate tax rate is 4.53 percent and sales tax is at an even 5 percent. North Dakota's revenue plan appears to be working as the state is forecasting a $1.6 billion surplus.

 North Dakota does need to work one area in particular that needs improvement if it wants to claim a No. 1 spot next year. It came in close to the bottom in our Technology and Innovation category at No. 46. It appears that the state is slowly turning that around. There has been an uptick in tech-driven companies because of the state's friendliness toward business. It also approved a 45 percent tax credit for equity investments in high-risk companies, one of the highest in the nation for similar credits.

ECONOMIC PROFILE

Governor: Jack Dalrymple (R)\

Population: 699,628

GDP growth: 13.4 percent

Unemployment rate (May 2013): 3.2 percent

Top corporate rate: 5.15 percent

Top individual tax rate: 3.99 percent

Gasoline tax: 23 cents/gallon

Bond rating/outlook: Aa1/Stable

Major private employers: North Dakota State University, Altru Health System, Sanford Health, St. Alexius Medical Center, Trinity Health, US Bank, Bobcat Co., Blue Cross & Blue Shield of North Dakota, Noridian Mutual Insurance Co., LM Wind Power

Economic profile sources: American Petroleum Institute (April 2013), Bureau of Economic Analysis (2012), Bureau of Labor Statistics (May 2013 release), CareerOneStop, Moody's Investors Service (senior-most tax-backed ratings), National Governors Association, Tax Foundation (2013), U.S. Census Bureau (2012 estimate)

This piece, by Anthony Volastro, originally appeared in CNBC.com. Read more at CNBC.com:

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