9 Best Places to Live If You Hate Paying Taxes – And What to Consider Before Moving There
Are you sick of paying taxes?
You’re not alone. According to a recent poll from the University of Chicago Harris School of Public Policy and The Associated Press-NORC Center for Public Affairs Research, most Americans say they pay too much taxes and see too little in return.
For most people, Federal income tax is the biggest point of contention, followed by sales and property taxes.
The good news is that nine states don’t tax your income, and five have no sales tax.
Keep in mind, that the lack of either tax is usually offset by other means because the states still need to generate revenue to pay for infrastructure, government salaries, and other projects.
If you want to ease your tax burden, consider moving to the following states:
1. Wyoming
Wyoming fares well on the list of states with a low tax burden. The Equality State has no tax on income, and has a relatively low property tax, with an effective property tax rate 0.55 percent (10th lowest in the country).
Much of the state’s revenue comes from natural resources. Wyoming has rich deposits of coal, petroleum, and natural gas. Which, brings it the most revenue.
The cost of living in Wyoming is 7 percent lower than the national average. You can still buy a home in Wyoming for less than $300,000, which can be seen as a big draw, as prices across major metros have skyrocketed in recent years.
However, Wyoming might not be for everyone. The state has no major urban areas, and the driving distance between cities can be up to 100 miles with treacherous driving conditions in winter, because of high winds and blizzards. The state’s job market is often ranked as poor outside of extractive industries like oil and gas, and winters in Wyoming are long and brutal.
2. Texas
Texas has had one of the fastest population growths over the last years, per Statista, as people from many parts of the country have flocked there, particularly from states with high regulations like California, New York, and Illinois.
According to surveys, new residents are attracted to Texas’ lower cost of living, warm climate, and strong job market. Another big draw of Texas is the lack of state income taxes and a favorable environment for businesses including good infrastructure, lack of corporate tax, and other incentives like exemptions on sales taxes and skilled workforce.
However, Texas also has the seventh-highest property tax in the country. Which, helps to pay for the state’s public services like police and firefighters.
On a good note, Texas homeowners recently got a tax break after the state legislature spent billions of dollars on the tax-cutting measures.
3. South Dakota
South Dakota has one of the lowest tax burdens in the United States. It has no state income tax and low sales tax at 4 percent – one of the weakest in the country, although property taxes in South Dakota are somewhat on the higher side.
The state is considered friendly to retirees as retirement-age folks with low income can qualify for additional benefits. It also has no estate tax or inheritance tax.
If you decide to make South Dakota your home, be ready for long, harsh winters.
4. Nevada
Nevada is another popular destination with no state income tax and low property taxes. Its major city, Las Vegas, has been growing for years, and as of 2024, it has a population of nearly 3 million people.
While most Las Vegas transplants are moving here from Southern California, as many of them are getting priced out, it’s not just the residents of the Golden State who find Nevada a good place to be. People from other states move to Las Vegas because of low regulations, a sunny climate with over 300 days of sunshine, and outdoor opportunities.
But there are some drawbacks too.
Nevada has a somewhat limited job market, as tourism and mining are still dominant industries in the state, especially in its biggest hubs like Las Vegas and Reno as gambling-related taxes help to fund the state’s budget.
The state’s education system is among the worst in the country, with its public schools ranking at the bottom. And finally, Southern Nevada, where most of the state’s population lives, faces significant challenges with its water supply.
5. Tennessee
Tennessee has one of the lowest tax burdens in the nation. While the average effective tax rate for residents in Tennessee is 7.6 percent, the state has one of the highest combined state and local sales tax rates – 9.548 percent.
Unfortunately, government data shows that the state’s tax structure generates low state and local revenues, leaving local programs and initiatives with little funds. Which, has an impact on working families.
The good news is that as of 2024, Tennessee’s cost of living is 9.7 percent below average across the country. Outside of Nashville, which has become the most expensive city in the state, because of the booming real estate market, among other factors, Tennessee is still relatively affordable.
If you head to Knoxville or Memphis you’ll be able to live cheaper than in most metropolitan cities, around the country.
6. Florida
Florida is one of the states that Americans are most likely to move to, according to MarketWatch. While the Sunshine State doesn’t tax your income, it places a levy on corporate profits – something to keep in mind if you want to run a business in Florida.
If you are considering Florida, something to keep in mind is the rising cost of housing. Desirable areas of Florida, especially those in the southern part of the state and along the Gulf, have seen a drastic increase in price because of wealthy retirees and vacationers who are often willing to pay above the asking price for waterfront properties.
Florida has seen an overall influx of residents from other states over the past few years. Which also contributed to rising prices on rent, goods, and services. The state also has above-average property taxes.
While Florida used to be an affordable state, things have changed drastically over the last decade. In April 2024, Florida had the highest inflation rate in the United States, which stood at 3.91 percent.
And if you’re a homeowner, be ready to pay. Florida’s home insurance is triple the national average, with an average of over $4,200. With rising sea levels and other climate change factors, the situation is only expected to exacerbate.
7. Washington
Washington is another state with no state income tax. It makes up for the lack of revenue, it imposes a steep gas tax on each purchased gallon – $0.494 per gallon. The Evergreen State taxes money earned from stocks and investments.
Sales taxes in Washington are also above average. Another con is an overall high cost of living and congestion in the Seattle Area, where traffic has become bad in recent years.
Plus, if you plan to live in the western part of the state be ready for overcast weather with frequent rains.
8. New Hampshire
New Hampshire has one of the highest property taxes in the country – 1.89 percent, which may well offset your savings from not having to pay state income tax.
While the state has no income and sales tax, it levies a 3 percent individual income tax on interest and dividends. It also ranked as the second most tax-friendly state in the country.
Drawbacks? With their high price for housing, healthcare, and services, New Hampshire has a higher-than-average cost of living. Also, winters in the Granite State could be downright brutal, especially for someone new to the Northeast.
9. Alaska
Alaska is the best state to live in if you truly, hate paying taxes. The state has no income or sales tax, but it levies an average combined state and local sales tax rate of 1.82 percent.
The state pays its residents an annual refund because of the excess revenue collected from oil companies.
The state’s property tax is about $3,687 on average. But on the other hand, the state has no estate or inheritance tax.
Trade-offs?
Alaska has the fifth highest cost of living of all states, so the money you save in taxes will probably be spent on groceries and other basic needs.
For starters, housing is very, expensive in the Last Frontier. And you’ll pay a lot for food as the state has unique challenges because of the logistics and dispersed population. Many goods need to be shipped from elsewhere, which translates to a higher price for consumers. Fresh produce like fruits and vegetables is also scarce.
Another big minus of Alaska is its remoteness. While it boasts unparalleled landscapes and you can see all sorts of amazing wildlife, you will be cut off from the rest of the world. Flying to the contiguous United States will cost you a pretty penny from here.
Beware of those winters, because you will pay through the roof to keep your house warm.
So, does it make sense to move to a state with low taxes?
Even if you don’t pay state income tax or sales tax, there are always some trade-offs to consider. While you might save on taxes, you could lack access to quality healthcare, education, or public services.
Which, are usually funded by property, income, or sales taxes. In most cases, even if you avoid one type of tax, the government will find a way to get its share in another form. Whether you should move to a state with a low tax burden depends on your, personal preferences and financial situation.
