Skip to headerSkip to main contentSkip to footer
Get our Free E-newslettersGet our Free E-newsletters
Kiplinger logoLink to homepage
Get our Free E-newslettersGet our Free E-newsletters
Subscribe to Kiplinger
Subscribe to Kiplinger
Save up to 76%
Subscribe
Subscribe to Kiplinger
  • Store
  • Home
  • Investing
  • Retirement
  • Taxes
  • Personal Finance
  • Your Business
  • Wealth Creation
    • Podcasts
    • Economic Outlooks
    • Tools
    • Kiplinger's Personal Finance Magazine
    • The Kiplinger Letter
    • The Kiplinger Tax Letter
    • Kiplinger's Investing for Income
    • Kiplinger's Retirement Report
    • Store
    • Manage My E-Newsletters
    • My Subscriptions
Skip advert
  • Home
  • Tax Breaks
Tax Breaks

TOP 10 TAX-FRIENDLY CITIES

It's not what you earn, it's what you keep that often dictates your standard of living.

by: the editors of Kiplinger's Personal Finance
April 6, 2018
Skip advert

It's not what you earn, it's what you keep that often dictates your standard of living. With that in mind, take this quick tour of the ten cities in the nation that have the lowest overall tax burden. These cities came out on top (er, at the bottom, really) of the 2007-2008 District of Columbia Tax Rates and Tax Burdens Survey for the largest city in each state, plus D.C.

Tax rankings are based on 2007 tax return computations for a two-income couple earning $75,000 with one school age child. The real property tax is a function of housing values, real estate tax rates, assessment levels, homeowner exemptions and credits. The auto tax figure assumes the couple owns two cars and is based on the estimated registration fees, state and local gasoline taxes, and personal property taxes, if any.

Skip advert
Skip advert
Skip advert

1 of 10

No. 1 Anchorage, Alaska

Grant Klotz

Skip advert

Income tax: $0
Property tax: $2,572
Sales tax: $0
Auto tax: $165

STATE & LOCAL TAX BURDEN: 3.6%
(National median tax burden: 8.5%)
Urban Facts: Taxes? Residents of Anchorage actually receive an annual "dividend" payment derived from levies on state oil drilling operations.

In sheer geographic size, the city of Anchorage is larger than the state of Rhode Island. It is home to 42% of all Alaskan residents.

 

Skip advert
Skip advert
Skip advert

2 of 10

No. 2 Manchester, New Hampshire

Skip advert

Income tax: $0
Property tax: $2,349
Sales tax: $0
Auto tax: $493

STATE & LOCAL TAX BURDEN: 3.8%
Urban Facts: New Hampshire's favorable tax structure and Manchester's proximity to Boston makes it an attractive residence for flinty New Englanders.

Skip advert
Skip advert
Skip advert

3 of 10

No. 3 Cheyenne, Wyoming

Matthew Idler/Cheyenne Area CVB

Skip advert

Income tax: $0
Property tax: $1,326
Sales tax: $1,512
Auto tax: $665

STATE & LOCAL TAX BURDEN: 4.7%
Urban Facts: Levies on mining and oil account for nearly half of the Equality State's tax revenues. Cheyenne is in close proximity to the geographical center of North America.

Skip advert
Skip advert
Skip advert

4 of 10

No. 4 Seattle, Washington

istockphoto

Skip advert

Income tax: $0
Property tax: $1,698
Sales tax: $1,561
Auto tax: $457

STATE & LOCAL TAX BURDEN: 5.0%
Urban Facts: Seattle may be a tax-friendly city, but it also has a high cost of living, well above the national average.

The median home sales price was $375,000 for last quarter of 2008, compared to $200,000 at the national level.

Skip advert
Skip advert
Skip advert

5 of 10

No. 5 Las Vegas, Nevada

EMILY BARNES/The Times-Union--02/02/07-Michael Phoumyyoth (cq, left) holds his son Brandon, 3, as they look at the Friendship Fountain, on the Southbank of the St. Johns River in downtown Jac

istockphoto

Skip advert

Income tax: $0
Property tax: $2,251
Sales tax: $1,072
Auto tax: $486

STATE & LOCAL TAX BURDEN: 5.1%
Urban Facts: Gaming taxes account for 27% of the state's general revenue funds.

The city's rapid growth a few years ago that drew more than 5,000 new residents every month was propped up on subprime lending. Now Las Vegas has the highest foreclosure rate among U.S. cities.

Skip advert
Skip advert
Skip advert

6 of 10

No. 6 Jacksonville, Florida

Emily Barnes/The Florida Times-Union

Skip advert

Income tax: $0
Property tax: $2,456
Sales tax: $1,284
Auto tax: $195

STATE & LOCAL TAX BURDEN: 5.2%
Urban Facts: The state intangibles tax on certain investments was repealed in 2007.

Jacksonville is the third-most populous city on the East Coast, after New York City and Philadelphia. (Other cities such as Boston, Washington, D.C., and Miami have larger metropolitan area populations.)

Skip advert
Skip advert
Skip advert

7 of 10

No. 7 Sioux Falls, South Dakota

City of Sioux Falls

Skip advert

Income tax: $0
Property tax: $2,760
Sales tax: $1,518
Auto tax: $294

STATE & LOCAL TAX BURDEN: 6.1%
Urban Facts: In fiscal year 2007, lottery gaming put $110 million in the state till to provide a 30% property-tax relief.

Sioux Falls has the largest shopping center between Minneapolis and Denver.

Skip advert
Skip advert
Skip advert

8 of 10

No. 8 Phoenix, Arizona

iStock

Skip advert

Income tax: $1,241
Property tax: $1,401
Sales tax: $1,849
Auto tax: $588

STATE & LOCAL TAX BURDEN: 6.8%
Urban Facts: Tax information for Phoenix includes the entire metropolitan area which extends to cities of Scottsdale, Mesa, Tempe, Mesa, Chandler, Gilbert, Glendale and Peoria. But housing prices and local tax can vary significantly from locality to locality.

Skip advert
Skip advert
Skip advert

9 of 10

No. 9 Billings, Montana

Jerry McElroy/istockphoto

Skip advert

Income tax: $2,559
Property tax: $1,865
Sales tax: $0
Auto tax: $689

STATE & LOCAL TAX BURDEN: 6.8%
Urban Facts: Billings taxpayers with adjusted gross incomes of less than $30,000 can exclude up to $3,600 of their pension income from state taxes.

Dubbed locally as the "Magic City," Billings is supporting growth by dunning its energy, agriculture, and transportation industries.

Skip advert
Skip advert
Skip advert

10 of 10

No. 10 Chicago, Illinois

Jerry McElroy/istockphoto

Skip advert

Income tax: $2,019
Property tax: $1,023
Sales tax: $1,624
Auto tax: $478

STATE & LOCAL TAX BURDEN: 6.9%
Urban Facts: Chicago's effective real-estate tax rate of .70% and various exemption programs keep real property tax low. Just keep in mind that this surprisingly tax-friendly city doesn't offer the same breaks for other cost-of-living expenses.

SOURCE: 2007-2008 District of Columbia Tax Rates and Tax Burdens Survey

 

Skip advert
Skip advert
Skip advert
  • how to save money
  • tax planning
  • real estate
  • Tax Breaks
Share via EmailShare on FacebookShare on TwitterShare on LinkedIn
Skip advert
Skip advert
Skip advert
Skip advert

Recommended

21 Best and Worst Things to Buy at Aldi
Aldi

21 Best and Worst Things to Buy at Aldi

If you haven’t made the acquaintance of this German supermarket chain, you’re missing out on some serious savings. But not every item is a hit. See ou…
July 5, 2022
Retirees, Make These Midyear Moves to Cut Next Year's Tax Bill
Tax Breaks

Retirees, Make These Midyear Moves to Cut Next Year's Tax Bill

Save money next April by making these six hot-as-July tax moves.
July 1, 2022
Biden Proposes Gas Tax Holiday, Urges States to Do the Same
Tax Breaks

Biden Proposes Gas Tax Holiday, Urges States to Do the Same

The proposed three-month federal gas tax holiday would bring down the price of gasoline slightly, while state gas tax holidays could reduce the price …
July 1, 2022
IRS Increases Mileage Rates Because of High Gas Prices
Tax Breaks

IRS Increases Mileage Rates Because of High Gas Prices

The higher mileage rates, which are used to calculate certain tax deductions for business and other uses of a car, took effect on July 1.
July 1, 2022

Most Popular

How to Use Your Estate Plan to Save on Taxes While You’re Still Alive!
estate planning

How to Use Your Estate Plan to Save on Taxes While You’re Still Alive!

Upstream basis planning is a trust strategy that can save wealthy people on their capital gains taxes and income taxes associated with highly apprecia…
July 3, 2022
Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
Don’t Be Tricked into Voluntarily Paying Higher Taxes on Your IRA
IRAs

Don’t Be Tricked into Voluntarily Paying Higher Taxes on Your IRA

Traditional IRAs are set up in a way that basically incentivizes you (and your heirs) into paying the highest tax bill possible. Don’t fall for it. Co…
July 4, 2022
  • Customer Service
  • About Us
  • Advertise With Us (PDF)
  • Privacy Policy
  • Cookie Policy
  • Kiplinger Careers
  • Accessibility
  • Privacy Preferences

Subscribe to Kiplinger's Personal Finance

Be a smarter, better informed investor.
Save up to 76%Subscribe to Kiplinger's Personal Finance
Do Not Sell My Information

Kiplinger is part of Future plc, an international media group and leading digital publisher. Visit our corporate site www.futureplc.com
© Future US LLC, 10th floor, 1100 13th Street NW, Washington, DC 20005. All rights reserved.

Follow us on InstagramFollow us on FacebookFollow us on TwitterConnect on LinkedInConnect on YouTube