Minnesota moves up one spot to No. 3 in America's Top States for Business, snagging 1,615 out of 2,500 possible points in CNBC's annual ranking. The North Star State's best categories are Education and Quality of Life, grabbing the No. 2 spot for both. Minnesota has some of the best K–12 test scores in the nation.

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However, the state is expensive. It finished No. 36 in Cost of Doing Business and No. 31 in Cost of Living. The state also has the third-highest top individual income-tax rate in the nation, at 9.85 percent.

No. 4: Texas

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For the first time in 11 years, Texas finished outside of the top two spots in our America's Top States for Business rankings. This year the Lone Star State fell to No. 4, down two spots from last year. The state scored 1,602 points out of 2,500 in our annual study. It's no surprise. Falling oil prices stunted the economy — Texas has diversified considerably, but energy is still the major industry — pushing unemployment above the national average, despite being among the fastest in the nation to add jobs. As a result, the state dropped in the Economy category from No. 1 to 25. Still, Texas remains a juggernaut, with America's top workforce and best infrastructure.

No. 5: North Carolina

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