You hate paying income taxes – right? So why not move to one of the nine states listed below that don't have an income tax? Your paycheck will be bigger, and that's one less tax form you have to worry about each year. If you're retired, that also means no tax on your Social Security benefits, withdrawals from your IRA or 401(k) plan, and payouts from your pension. How's that sound?
But, of course, no state is perfect. States without an income tax still need money to pay for roads and schools, so residents have to pay other taxes to keep the state running (like sales, property and estate taxes). And sometimes those other taxes can be on the high end. For example, two states with no income tax have median property tax rates that are among the ten highest rates in the entire country. Two other states without an income tax are among the states with the highest sales tax rates. So, if you're thinking of moving to a state without an income tax, continue reading to see some of the other taxes you'll have to pay in those states. Maybe the state you're in right now won't look so bad.
Average combined state and local sales tax values are for 2022 and were compiled by the Tax Foundation. Property tax data is from 2020 and is based on information from the U.S. Census Bureau. Overall tax ratings are from the State-by-State Guide to Taxes on Middle-Class Families (opens in new tab).
Alaska Taxes
Overall Rating for Taxes: Most Tax-Friendly
State Income Taxes: None.
Sales Tax: Alaska is one of five states with no state sales tax. However, localities can levy sales taxes, which can reach 7.5%. Higher rates are found in locations that lack a property tax. But, according to the Tax Foundation, the statewide average is only 1.76%.
Property Taxes: In Alaska, the median property tax rate is $1,212 per $100,000 of assessed home value. That's slightly above the national average.
Inheritance and Estate Taxes: There is no inheritance tax or estate tax.
For more information, see the Alaska State Tax Guide (opens in new tab).
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Florida Taxes
Overall Rating for Taxes: Most Tax-Friendly
State Income Taxes: None.
Sales Tax: 6% state levy. Localities can add as much as 2%, and the average combined rate is 7.01%, according to the Tax Foundation. The combined rate is middle-of-the-road when compared to other states.
- Groceries: Exempt
- Clothing: Taxable
- Motor Vehicles: Taxable (additional county tax on first $5,000 of purchase price may apply)
- Prescription Drugs: Exempt
Property Taxes: In Florida, the median property tax rate is $859 per $100,000 of assessed home value. That's also pretty average when compared nationally.
Inheritance and Estate Taxes: There is no inheritance tax or estate tax.
For more information, see the Florida State Tax Guide (opens in new tab).
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Nevada Taxes
Overall Rating for Taxes: Most Tax-Friendly
State Income Taxes: None.
Sales Tax: 6.85% state levy. Localities can add as much as 1.53%, and the average combined rate is 8.23%, according to the Tax Foundation. That's a pretty high combined rate.
- Groceries: Exempt
- Clothing: Taxable
- Motor Vehicles: Taxable
- Prescription Drugs: Exempt
Property Taxes: Nevada's median property tax rate is $572 per $100,000 of assessed home value, which is one of the lowest rates in the U.S.
Inheritance and Estate Taxes: There is no inheritance tax or estate tax.
For more information, see the Nevada State Tax Guide (opens in new tab).
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New Hampshire Taxes
Overall Rating for Taxes: Mixed Tax Picture
State Income Taxes: New Hampshire doesn't tax earned income, but currently there's a 5% tax on dividends and interest in excess of $2,400 for individuals ($4,800 for joint filers). The tax on dividends and interest is being phased out, though. The rate will be 4% for 2023, 3% for 2024, 2% for 2025, and 1% for 2026. The tax will then be repealed on January 1, 2027.
Sales Tax: New Hampshire has no state or local sales tax.
Property Taxes: The median property tax rate in New Hampshire is $2,129 per $100,000 of assessed home value. That's the fourth-highest rate in the country.
Inheritance and Estate Taxes: There is no inheritance tax or estate tax.
For more information, see the New Hampshire State Tax Guide (opens in new tab).
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South Dakota Taxes
Overall Rating for Taxes: Tax-Friendly
State Income Taxes: None.
Sales Tax: 4.5% state levy. Localities can add as much as 4.5%, and the average combined rate is 6.4%, according to the Tax Foundation. That's a below average combined rate.
- Groceries: Taxable
- Clothing: Taxable
- Motor Vehicles: Exempt from ordinary sales tax, but taxable under special 4% excise tax
- Prescription Drugs: Exempt
Property Taxes: The median property tax rate in South Dakota is $1,288 per $100,000 of assessed home value. That's above the national average.
Inheritance and Estate Taxes: There is no inheritance tax or estate tax.
For more information, see the South Dakota State Tax Guide (opens in new tab).
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Tennessee Taxes
Overall Rating for Taxes: Most Tax-Friendly
State Income Taxes: None.
Sales Tax: 7% state levy. There's also an additional state tax of 2.75% on sales of single items that applies to the portion of the sales price from $1,600 to $3,200. Localities can add up to 2.75%, with an average combined state and local rate of 9.547%, according to the Tax Foundation. That's the highest combined rate in the nation. Local taxes are limited, though: Only the first $1,600 of any single item is taxable.
- Groceries: Taxable (4% state rate; additional local taxes may apply)
- Clothing: Taxable
- Motor Vehicles: Taxable (7% basic rate, plus 2.75% state tax on sales price between $1,600 and $3,200; additional local taxes may also apply)
- Prescription Drugs: Exempt
NOTE: The sales tax on groceries is suspended during August 2022.
Property Taxes: The median property tax rate for Tennessee homeowners is $685 per $100,000 of assessed home value, which is well below the national average.
Inheritance and Estate Taxes: There is no inheritance tax or estate tax.
For more information, see the Tennessee State Tax Guide (opens in new tab).
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Texas Taxes
Overall Rating for Taxes: Mixed Tax Picture
State Income Taxes: None.
Sales Tax: 6.25% state levy. Localities can add up to 2%, with an average combined rate of 8.2%, according to the Tax Foundation. Texas' combined rate is well above the U.S. average.
- Groceries: Exempt
- Clothing: Taxable
- Motor Vehicles: Taxable
- Prescription Drugs: Exempt
Property Taxes: The median property tax rate in Texas is $1,753 per $100,000 of assessed home value. That's the seventh-highest rate in the country.
Inheritance and Estate Taxes: There is no inheritance tax or estate tax.
For more information, see the Texas State Tax Guide (opens in new tab).
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Washington Taxes
Overall Rating for Taxes: Most Tax-Friendly
State Income Taxes: None. [Note that, beginning in 2022, the state is set to impose a 7% tax on the sale or exchange of certain long-term capital assets if the annual profits exceed $250,000. However, the constitutionality of the Washington capital gains tax is being challenged in the courts. A lower court has ruled the tax is unconstitutional, but an appeal is expected.]
Sales Tax: 6.5% state levy. Municipalities can add up to 4% to that, with the average combined rate at 9.29%, according to the Tax Foundation. Washington's combined rate is the fourth-highest in the nation.
- Groceries: Exempt
- Clothing: Taxable
- Motor Vehicles: Taxable (6.5% ordinary rate, plus additional 0.3% tax)
- Prescription Drugs: Exempt
Property Taxes: The Washington median property tax rate is $958 per $100,000 of assessed home value, which is close to the midpoint when compared to other states.
Inheritance and Estate Taxes: For 2022, an estate tax is imposed by Washington on estates with a value exceeding $2.193 million (the exemption threshold is subject to adjustment each year for inflation). Tax rates range from 10% to 20%. The state offers an additional $2.5 million deduction for family-owned businesses valued at less than $6 million.
For more information, see the Washington State Tax Guide (opens in new tab).
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Wyoming Taxes
Overall Rating for Taxes: Most Tax-Friendly
State Income Taxes: None.
Sales Tax: 4% state levy. Municipalities can add up to 2% to that, with a combined rate of 5.22%, according to the Tax Foundation. The combined rate is the eighth-lowest in the U.S.
- Groceries: Exempt
- Clothing: Taxable
- Motor Vehicles: Taxable
- Prescription Drugs: Exempt
Property Taxes: In Wyoming, the median property tax rate is $605 per $100,000 of assessed home value, which is the 11th-lowest in the nation.
Inheritance and Estate Taxes: There is no inheritance tax or estate tax.
For more information, see the Wyoming State Tax Guide (opens in new tab).
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