Almost everyone longs for a lower tax bill. One way to achieve that is to live in any State with no income tax. In this article, we’ll list the eight states with no income tax and give you a breakdown of what living in those states means.
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The largest state in the US, Alaska is one of the most tax-friendly states in America. Alaska revoked its personal income tax in 1980 and began taxing oil and gas production companies at high rates to generate revenue.
As of 2022, Alaska’s entire local and state tax burden is 4.6%, the lowest in the United States. The only drawback is that it’s remote and expensive in other areas. Overall, the Last Frontier ranks 40 out of 50 on U.S. News & World Report’s affordability list.
The Sunshine State is popular for retirees and vacationers because of its no income tax policies. Florida generates most of its revenues from state university tuition, property taxes, and highway tolls. As of 2022, the state’s overall local and state tax burden was 9.1%.
For many people, the cost of living in Florida may be high. However, many Florida residents still have to deal with a competitive housing market and prices.
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As of 2022, the Silver State’s overall local and state tax burden is 9.6%. The state generates most revenues from sales and excise tax, including alcohol and groceries. Besides sales and excise tax, Nevada also generates revenues from taxes from hospitality and tourism-heavy industries, including gaming and hotels.
Nevada’s property tax rate is among the lowest in the United States. Check out these guides on Amazon if you would love to learn more about state and federal income tax.
Mount Rushmore State is popularly known as one of the top locations for retirees in the United States. When it comes to affordability, U.S. News & World Report ranks South Dakota 12 out of 50 in the United States. The ranking is based on the state’s cost of living and housing scores.
As of 2022, South Dakota’s sales and local tax burden is 8.4%. The Mount Rushmore State generates its revenue from sales and excise taxes. It levies tax on items such as motor fuel, tobacco, and alcohol.
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The second largest state in the US, Texas, is commonly known for its “go big or go home” way of operation. In general, the state takes its loathing of income tax so seriously that the ban is included in its constitution.
The Volunteer State is among the US states with no income tax. However, the state imposes a high sales tax. Plus, it charges tax on items such as fuel, beer, and fantasy sports contests. Despite the high sales tax, Tennessee’s overall local and state tax burden is 7.6% as of 2022.
The Evergreen State doesn’t have income tax nor impose a corporate income tax. Many companies find this no corporate income tax policy appealing.
However, with the introduction of the new WA Cares Fund, Washington residents now see a deduction of 58 cents for every $100 from each paycheck. The deducted funds go toward a long-term care fund.
In addition to that, Washington also imposes a 7% long-term capital gains tax on assets sold for a profit of $250,000 and above. Overall, the state’s local and state tax burden is 10.7% as of 2022.
Wyoming is a state in the Mountain West subregion of the Western US. The state has no personal or corporate income tax, so it depends on property, oil, sales, and excise taxes to generate revenue.
As of 2022, the state’s overall local and state tax burden is 7.5%. When it comes to housing and cost of living, the Equality State scores more than average.
Living in states with no income tax is one of the ways to lower tax bills. So, based on the information provided here about each state’s taxation, it’s up to you to decide which among them will be best for you. Don’t forget to get one or two of these guides on Amazon If you need help with relocation planning.
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