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:
- Income taxes at Federal and State level (including FICA)
- Property taxes
- Sales taxes
The number one retirement tax-friendly state is Alaska.
At top for lowest tax burden is Alaska, followed by Wyoming and Tennessee.