Among all 50 states, Wyoming, South Dakota, and Nevada offer the best tax systems for growing businesses, according to the Tax Foundation.

Based on how well business taxes encourage investment, the Washington-based policy group's annual ranking weighs the impact of corporate tax, individual income tax, sales tax, unemployment tax, and property tax on a state's overall business climate.

"There's no question that states are competing with one another for companies, jobs, and people," Curtis Dubay, who co-wrote the list, said in a statement. States without a strong business tax climate are "losing ground to states actively improving their climates," Dubay said.

The three worst states on this year's list were Maine, Minnesota, and Nebraska.