A study released earlier this month ranks Washington as the No. 1 state for entrepreneurs in 2025.

Simplify LLC, an independent publication that provides free guides for small business owners, conducted its “Best & Worst States for Entrepreneurs in 2025” study by analyzing six categories of data from the Census Bureau, Bureau of Economic Analysis, Tax Foundation and the U.S. Senate.

Those six categories are job creation, consumer spending, inflation, business growth, corporate taxes and educated worker migration.

“[Washington’s] No. 1 spot was driven by strong business growth and a lack of corporate income taxes, making it an appealing state to set up shop,” the report said.

Washington does not have a personal or corporate income tax. However, according to the state Department of Revenue, people or businesses that engage in business in Washington are subject to a business and occupation, or B&O, tax and/or public utility tax. Gross receipts determine the amount of tax businesses are required to pay.

Here is how Washington scored in the six categories:

Job creation rate: 16.55 (Rank: 16)Consumer spending growth: 3.9% (Rank: 1)Regional inflation: 20% (Rank: 10)New Business growth: 110.8% (Rank: 1)Maximum corporate tax rate: 0% (Rank: 1)Net migration of educated workers: -508 (Rank: 33)

The Evergreen State’s overall No. 1 ranking is a major improvement on its No. 8 ranking in the 2024 study.

Rounding out the five best states for entrepreneurs in 2025 are Texas, Maine, Nevada and Oregon.

The five worst states are Alabama, Iowa, Minnesota, Mississippi and West Virginia.