What Is the Most Tax Friendly State? Tax-Friendly States in America

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Wyoming is the most tax-friendly state, where residents pay $3,438. For a typical middle-class family, the tax burden difference between living in the highest-tax state (Illinois) and the lowest-tax state (Wyoming) is $11,340 per year.

No Income Tax States

As a general rule, states with no income tax have much higher property and sales taxes.

What 9 states have no taxes? Right now, the nine states that don’t collect personal income taxes are:

  • Alaska
  • Florida
  • Nevada
  • New Hampshire
  • South Dakota
  • Tennessee
  • Texas
  • Washington
  • Wyoming

Understanding State’s Tax Impact

Discover the pros and cons of each state, and learn how taxes can impact your financial situation. Wyoming is the most tax-friendly state for middle-class families and retirees, offering low sales and property tax in addition to no income tax.

States with the lowest tax burden are considered to be "tax-friendly " for these rankings. Sales tax was not calculated for states that don’t tax essentials at the state level.

Georgia’s 5.75% top individual income tax rate is on the lower end among states with income taxes.

North Dakota’s state income tax rate ranges from 1.1% to 2.9%, among the lowest rates in the nation.

MoneyGeek’s analysis found that Wyoming is the most tax-friendly state in America, followed by Nevada, Tennessee, Florida, and Alaska.

The states with the lowest percentage of income spent on state taxes are:

  • Georgia
  • Delaware
  • North Dakota
  • Colorado
  • Arizona

Comparing Tax Friendliness

Alabama has highest income tax on list but is tax-friendly toward retirees.

4 states have no statewide sales tax:

  • Delaware
  • Montana
  • New Hampshire
  • Oregon

Maine ranked safest state in America.

10 states with highest and lowest income tax rates. 4 states receive an F grade — in Illinois, taxes are 17% of household income.

To generate each state’s tax bill:

  1. Income taxes at Federal and State level (including FICA)
  2. Property taxes
  3. Sales taxes

The number one retirement tax-friendly state is Alaska.

At top for lowest tax burden is Alaska, followed by Wyoming and Tennessee.

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