The report points to its estate/inheritance tax not being levied, its low state minimum wage, its low average workers' compensation costs and being a right-to-work state.
Nevada, unlike Indiana, remained in the top 15 for the last six years, and in 2018, it ranked No. 13 on the list. This year, it skyrocketed to Nov. 4.
The report points to its top marginal personal and corporate income tax rates, its estate/inheritance tax not being levied, how many public employees it has and how it's a right-to-work state. It also has a great number of tax expenditure limits.
3. North Dakota
North Dakota has consistently ranked in the top five for the past seven years.
The report indicates North Dakota's recent tax changes contributed to its high ranking, as well as not taxing estate or inheritance, low average workers' compensation costs, low minimum wage, debt service as a share of tax revenue and it being a right-to-work state.
Idaho fell to No. 10 in 2017, but it's rebounded since then, maintain its No. 2 ranking.
The report says its low minimum wage, not taxing estate and inheritance as well as it is a right-to-work state status contributed to its consistent success. The state also recently legislated some tax changes and has a debt service as a share of tax revenue.
The Heritage Foundation's Stephen Moore said on FOX Business' "Bulls and Bears" on Monday that Utah got the top spot for many reasons, including its flat-rate income tax of 5 percent and its lack of an estate tax.
"Utah spends ... less than any other state per pupil on education, on public education, and yet, they have the highest test scores and the best results," Moore told David Asman.
Utah has held the No. 1 spot since 2012.
The ranking bases its forecast on the "state's current standing in 15 state policy variables," which includes things like the state's Gross Domestic Product and Non-Farm Payroll Employment, which the report says is "highly influenced by state policy."
"Generally speaking, states that spend less -- especially on income transfer programs -- and states that tax less -- particularly on productive activities such as working or investing -- experience higher growth rates than states that tax and spend more," the report reads.
The report ranked Hawaii, New Jersey, California, Illinois, Vermont and New York as the five states with the worst economic outlook, respectively.