They say there are only two things in life that are certain; death and taxes. Although the former is unavoidable, the latter is something that can be managed. A major contributing factor to the amount of taxes you are having to pay is likely attributed to the city, or state, in which you reside. While packing up and moving across the country may not be an option for everyone, there are a handful of states that offer lower taxes than the majority of others.
If you’re looking for a new place to call home, consider the following states which are known for having some of the lowest tax rates in the country:
With no individual income or corporate taxes, Wyoming is one of the most tax-friendly states in the US – making it an ideal destination for those looking to minimize their tax burden. Residents of Wyoming also enjoy low sales tax and no retirement income tax, which can be very beneficial for those looking for affordable places to retire.
The state is able to offer such low taxes due in part to its abundance of natural resources, such as oil, which is taxed to make up for the lack of personal taxes. Despite not heavily taxing its residents, Wyoming still offers top-quality public services. In fact, in 2019, Wyoming was one of the top spendings on education, shelling out roughly $16,304 per pupil.
So for those looking for a place with low taxes, beautiful landscapes, and good public services, Wyoming should be high on your list.
The Last Frontier – as Alaska is commonly referred to – is another state with no individual or corporate income tax, and one of the lowest sales taxes in the nation. It also has a generous oil-revenue-sharing program that helps keep tax rates low for residents.
In fact, Alaska is so tax-friendly that it has one of the nation’s highest per capita incomes – year after year. Despite not having a state income tax, Alaska offers its residents a Permanent Fund Dividend (PFD) each year as part of the revenue generated from taxes on oil and gas production. The amount varies and is payable to residents that have lived in the state for an entire calendar year, and intend to remain for the foreseeable future.
In both education and healthcare, Alaska has some of the highest spendings in the country per capita. It is important to note that, despite being at the top of the list for tax-friendly states, Alaska is also considered one of the most expensive states in terms of cost of living.
With no individual income tax, and a sales tax rate of 6%, Florida is another great option for those looking to save on taxes. In addition to the lack of personal income tax, Florida also offers retired residents a “homestead exemption” which eliminates property taxes for those over 65 who have lived in their homes for at least 25 years.
South Flordia realtor Jeff Tricoli explained the benefits of living in FL, “Florida is also one of the few states that do not tax Social Security benefits, making it an attractive option for retirees. Furthermore, Florida does not impose a tax on estates or gifts, which can be beneficial for those looking to pass down wealth to their children or grandchildren.”
Unfortunately, despite having some of the lowest taxes in the country, Florida lags behind most other states in terms of public education. However, the state does invest heavily in health care, ranking 14th of highest in spending in recent years.
New Hampshire is another state that does not tax its residents on income or sales, making it a great option for those looking to minimize taxes paid. New Hampshire does have a high property tax rate, so it is important to keep that in mind when considering this option.
“The state of New Hampshire also has no inheritance or estate tax, which can be beneficial for those looking to pass down wealth. Furthermore, the state does not tax Social Security benefits or retirement income, making it an ideal choice for retirees.” – says Brenda Richardson, Senior Contributor Forbes.com.
As with all states that offer tax savings to their residents, there are areas that lag in terms of public services. In New Hampshire, the education system is one of those areas, as the state ranks near the bottom in terms of spending per pupil. Despite this, New Hampshire is one of the top spenders in regard to health care with just over $9,500 per capita in 2022.
So if you’re looking for a state with low taxes and good public services, Wyoming, Alaska, Florida, or New Hampshire should be high on your list. Keep in mind that each of these states has its own unique benefits and drawbacks, but in terms of personal tax savings, all four are great options.
We hope you found this blog post on Are You Considering Moving To A Cheaper City? Check Out These States With Lower Taxes useful. Be sure to check out our post on Moving from New York to Florida – State to State Moving for more great tips!