Ohio Cut Red Tape. Now Its Business Sector Is Thriving.

If you’re an entrepreneur, you might want to consider relocating to the Rust Belt. 

CNBC recently released its 20th annual America’s Top States for Business rankings, which rated Ohio as the most business-friendly state in the country. North Carolina, Virginia, Texas, and Minnesota rounded out the top five. 

CNBC scores states on seven categories—infrastructure, economy, workforce, cost of doing business, tech and innovation, quality of life, and business friendliness—that businesses prioritize when deciding where to plant their flag. The scores are then weighted by how frequently states use those categories as selling points. With a nationwide focus on energy, water access, and the return of onshore manufacturing, CNBC chose infrastructure as its top-weighted category, factoring in grid reliability, energy capacity, and ease of permitting for the first time in its rankings.

It should come as no surprise that Ohio and other states that eschew red tape are near or at the top of the rankings. Since 2012, lawmakers in the Buckeye State have made it a priority to attract new business by easing regulations. Last year, Ohio passed House Bill 15 to reform its permitting process for new infrastructure projects. The bill set a 150-day deadline for the Ohio Power Siting Board to review complete applications, reduced the property tax rate on new energy generation and conversion equipment to 7 percent (from 25 percent), and set the tax rate on new transmission, distribution, and pipeline infrastructure to 25 percent (instead of the 85 percent–88 percent charged for existing assets). 

Under this law, utilities and transmission operators must publish public-facing transmission capacity heat maps that show where developers can plug in and where the grid is maxed out. It also lets data centers, factories, and other large electric-load customers plug directly into their own power plants rather than tapping the existing grid, meaning projects can get up and running faster without raising rates for other consumers. 

It’s a similar story in North Carolina. After finishing first in the CNBC rankings in 2025—its third top-place finish in four years—the Tar Heel State came in second this year. Since 2015, North Carolina has transformed itself, much like Ohio, by prioritizing permitting and land-use reforms that have made the state a haven for entrepreneurs. 

In 2015, the state passed House Bill 795, which reduced the number of projects subject to its State Environmental Policy Act by raising the monetary threshold for review and expanding the list of exempt projects. The state’s Permit Toolbox guides prospective applicants through its regulatory process and includes an Express Permitting Program that provides projects with an expedited review, albeit at a higher cost. In 2023, the state passed Senate Bill 677, which set strict time limits for municipal governments to review infrastructure projects and allowed developers to use third-party reviewers instead of local permitting offices. 

North Carolina also has the lowest corporate tax rate in the nation—a flat 2 percent rate—which will be fully phased out by 2030. 

Recognizing that businesses need abundant energy to thrive, Virginia, Texas, and Minnesota have all undergone substantial changes to their permitting process for energy projects. 

In 2024, Minnesota simplified its environmental review process, which was expected at the time to cut permitting times for energy projects by “nine months to a year” and reduce the timeline for project approval by at least 50 percent, according to Utility Dive. However, a year later, there’s no data on the policy’s effects. Virginia’s success is more apparent. Reforms signed into law in 2022 by former Virginia Republican Gov. Glenn Youngkin have led to a 66 percent reduction in permit processing times in the commonwealth. Texas, meanwhile, allows power generators to connect to the grid with fewer permits than are needed in other states.

Of course, there’s still room for improvement. The top five states have also made a habit of pairing permitting reform with grants, subsidies, and tax credits that unnecessarily prop up one industry over another, casting lawmakers as the arbiters of who wins and loses in business. 

Ohio, for instance, uses revenue from its liquor monopoly to fund JobsOhio. This private nonprofit helps companies navigate the permit process and find incentives and tax breaks to set up shop in Ohio. North Carolina offers several grants and tax incentives to attract high-value companies, such as sales and use tax exemptions for data centers, software publishers, manufacturers, fulfillment facilities, warehouses, and research and development activities.

Luckily, this favoritism is beginning to receive pushback from the general public. In Ohio, the backlash against tax breaks offered to data centers and other priority businesses prompted Republican Gov. Mike DeWine to pause the state’s tax exemptions, a sentiment Texas Republican Gov. Greg Abbott echoed in a letter to state regulators. Virginia, which has the most data centers in the country, recently passed a first-of-its-kind electricity consumption tax on data centers instead of eliminating its tax incentives.

Permitting reform and deregulation aren’t sexy policy ideas, but they are effective in driving job creation and making people better off. As these states take the lead, hopefully other states and the federal government will soon follow suit.