Tool | August 2013
State-by-State Guide to Taxes on Retirees
State Sales Tax
The state does not have a sales tax. However, 104 municipalities impose local sales taxes, which can go as high as 7%. But, according to the Tax Foundation, the statewide average is 1.69%.
Income Tax Range
No state income tax.
Benefits are not taxed.
Exemptions for Other Retirement Income
Retirement income is not taxed.
Although taxing property is the primary method of raising revenues for most of the larger municipalities in the state, smaller municipalities favor a sales tax. This is primarily because the smaller incorporated areas lack a tax base large enough to support the property tax. Property is assessed at full value. Tax rates are determined locally, up to a maximum of 3% for cities. Median property tax on the state's median home value of $232,900 is $2,422, according to the Tax Foundation.
Tax breaks for seniors: Homeowners 65 and older (or surviving spouses 60 and older) are exempt from municipal taxes on the first $150,000 of assessed value of their property.
There is no inheritance tax or estate tax.
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