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Making Your Money Last

5 States That Don't Levy a Sales Tax

A break from sales taxes is nice, but it doesn't guarantee a good tax climate for retirees.

If you'll be living on a fixed income in retirement, every dollar will count. That's why it’s smart to factor in all expenses including taxes when picking a place to retire.

See Also: 15 Worst States for Retirement

Take sales tax. Forty-five states impose a statewide sales tax. The District of Columbia does, too. That leaves just five states that don't: Alaska, Delaware, Montana, New Hampshire and Oregon.

But the absence of a sales tax alone doesn’t make a state great for retirement. Oregon ranks among the worst tax states for retirees due to its high income taxes and state-level estate tax. Besides, claims of no sales tax can be deceiving. While it’s true that Alaska and Montana have no statewide sales tax, both states permit local sales taxes.

Our advice: Weigh a state’s complete tax picture—from income tax to sales tax to property tax—to determine how your money will be taxed and how you can budget for those costs in retirement. Kiplinger’s tax maps can help.