Texas tops the list of best states to start a business for the second year in a row, according to an annual study by WalletHub.

The study highlights Texas' abundance of business incentives and its exceptional growth in small businesses.

Texas had the 5th highest amount of spending on business incentives -- totaling 1.3% of its GDP, according to WalletHub. The Lone Star State has a wide variety of non-profit and government-backed programs for assisting small businesses with funding, and regularly leads the nation in job growth.

In June, Dallas led the nation in job growth among small businesses in the monthly Paychex | IHS Markit Small Business Employment Watch.

The state also saw its number of small businesses grow at a rate of nearly 11%, according to the study's findings, and Texas businesses overall had the third-highest rate of average revenue growth in the country.

Texas has the third-highest rate of working-age population growth, a statistic that promises a growing workforce in the future. The state already boasts a labor pool of more than 14 million people.

The study also found Texas had the fourth longest average workweek compared to other states -- a welcome metric for employers, but perhaps not so welcome for employees.

While Texas received high marks for many aspects of its business environment, it also ranked in the bottom half of the U.S. for the cost of doing business in the state. Labor costs ranked Texas lower than most states, citing a median annual income of $57,000.

The study also points to another piece of the state's business environment that poses a threat to its continued growth -– the availability of workers. The state has seen historically low unemployment, causing concern among economists.

WalletHub analyzed more than two dozen metrics relevant to starting a business, including taxes, labor costs, cost of living, growth in number of small businesses, the ability to access financing and the quality of nearby universities.

Utah and Georgia were ranked as the next best states behind Texas.