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Best Cities, States & Places

The Best State to Live In for Low Taxes

The First State ranks first in our analysis of tax-friendly places to live.

States tax residents in a variety of ways. Place too much emphasis on any one tax, and you run the risk of missing the bigger tax picture. A state with no income tax might very well levy high sales taxes. No sales tax might be offset by steep property taxes.

See Also: 10 Worst States to Live In for Taxes

After analyzing the tax policies of all 50 states and the District of Columbia, we identified the state that takes the gentlest overall tax bite out of its residents. That state is Delaware.

Known as the First State, Delaware is a low-tax oasis amid high-tax states along the Eastern Seaboard. It has no sales tax, income taxes are modest, ranging from 2.2% to 6.6%, and its gas taxes are well below average. Property taxes as a percentage of home values are the fourth-lowest in the U.S. Even taxes on beer and wine are bargains compared to most states.

Check out nine more states that rank highly for tax-friendliness. Plus, take a look at our comprehensive state-by-state guide to taxes for more information on all 50 states and the District of Columbia.