15 States That Tax Your Income the Least

Author: Maurie Backman | March 13, 2018

Map of the United States.

Source: Getty Images

1 of 16

Take home more of what you earn

Like it or not, taxes are a part of life. It’s not just the federal government that takes a portion of your money, however. Depending on where you live, you might lose a chunk of your income to state taxes as well. With that in mind, here are the states that will leave you with more of your hard-earned paycheck, courtesy of GOBankingRates

ALSO READ: Here's Where State Income Taxes Jumped in 2018

Previous

Next

Male kayaker in Sitka Harbor, Alaska.

Source: Getty Images

2 of 16

1. Alaska

Alaska is among the most tax-friendly states in the country because it does not impose an income tax or a sales tax. In fact, Alaska residents actually get paid to live where they do -- royalties from natural resources are shared with those who make Alaska their home. That said, the cost of living in Alaska is far from cheap -- it’s considerably higher than the national average.


Previous

Next

An aerial view of South Beach, Miami.

Source: Getty Images

3 of 16

2. Florida

There’s a reason retirees tend to flock to Florida. Sunny weather aside, Florida has no income tax, which means workers get to keep more of their paychecks and seniors keep more of their IRA or 401(k) withdrawals. Property taxes in Florida are relatively low as well.

Previous

Next

The welcome to Las Vegas sign.

Source: Getty Images

4 of 16

3. Nevada

Even if you're not drawn to its nightlife, you might choose to set up residence in Nevada regardless. That's because Nevada does not impose a state income tax, as it gets plenty of revenue from gaming. That said, Nevada's sales tax rate is on the higher side.

Previous

Next

Fall foliage in White Mountain National Park, NH.

Source: Getty Images

5 of 16

4. New Hampshire

With no income tax to show for, residents of New Hampshire can hang onto a larger chunk of their earnings. Throw in the fact that there's no sales tax either, and you'd think it would rank as one of the most tax-friendly states in the country. But not so fast -- New Hampshire's property taxes are among the highest nationwide, and though residents don’t pay taxes on job-related earnings, they are taxed on dividend and investment income. 

ALSO READ: These 5 States Get the Best Bang for Their Buck From Federal Taxes

Previous

Next

View of presidential Mount Rushmore rock carvings.

Source: Getty Images

6 of 16

5. South Dakota

Home to Mount Rushmore, South Dakota is another state that doesn't have an income tax. Furthermore, its sales tax is relatively low, making it an affordable place to live on a whole. In fact, its overall cost of living is lower than the national average.


Previous

Next

The Nashville skyline at dusk.

Source: Getty Images

7 of 16

6. Tennessee

If you live in Tennessee, you won't lose a portion of your paycheck to state taxes, but as is the case in New Hampshire, you will pay taxes on dividends and income from investments. Tennessee also has a relatively high sales tax -- but if you dig the music scene, it may be worth paying that premium. 

Previous

Next

A welcome to Texas sign.

Source: Getty Images

8 of 16

7. Texas

Texas is among those states that don't impose an income tax, which means you get to keep more of your earnings. But living in Texas is by no means cheap. With both property and sales taxes being relatively high, you'll need to be mindful of your budget if you choose to reside in the Lone Star State.

Previous

Next

The Seattle skyline.

Source: Getty Images

9 of 16

8. Washington

Because Washington is able to generate revenue via its higher-than-average sales tax and gasoline tax, residents are spared an actual state income tax. Property tax-wise, Washington falls somewhere in the middle among the 50 states, but the cost of living in major cities like Seattle is notably higher than the national average.

ALSO READ: Ka-Ching! 6 States With the Highest Average Income

Previous

Next

Cows grazing with Heart Mountain, Wyoming in the background.

Source: Getty Images

10 of 16

9. Wyoming

Like wide, open spaces with plenty of room for your bison to graze? Then head on over to Wyoming, where you won't pay a dime in state income taxes. Coal mining revenue and hunting licenses alone help Wyoming stay afloat without having to impose a tax on residents' income.

Previous

Next

North Dakota pinned on a map.

Source: Getty Images

11 of 16

10. North Dakota

Though North Dakota does impose an income tax, its rates range from just 1.1% to 2.9%, with the highest rates applicable to only the state's highest earners. Compared to the rest of the country, that 2.9% is relatively low, and property and sales taxes fall somewhere in the middle.

Previous

Next

The Grand Canyon.

Source: Getty Images

12 of 16

11. Arizona

If you don't mind the heat, Arizona is a relatively tax-friendly place to live on a whole. Its state income tax ranges from 2.59% to 4.54%, though the latter rate applies only to the state's highest earners. Property taxes are relatively low in Arizona as well.

Previous

Next

The Chicago skyline at night.

Source: Getty Images

13 of 16

12. Illinois

State taxes aren't so bad in Illinois -- but real estate taxes are a different story. Illinois currently imposes the second-highest property tax rate in the nation, lagging only behind New Jersey in this regard.

ALSO READ: Hate Paying Income Tax? These 7 States Don't Have Any

Previous

Next

Welcome to Kansas sign.

Source: Getty Images

14 of 16

13. Kansas

With its notoriously windy weather, Kansas has a state income tax rate ranging from 3.1% to 5.7%. Though this represents a notable increase from past years, it's still a relatively low state income tax rate overall.

Previous

Next

The French Quarter in New Orleans, LA.

Source: Getty Images

15 of 16

14. Louisiana

Lower earners in Louisiana won't pay a lot of state income tax; but income in excess of $50,000 is taxed at a higher 6% rate. And while property taxes in Louisiana are fairly low, the state's high sales tax more than compensates in a not-so-good way.

Previous

Next

The Castle Hill Lighthouse in Rhode Island.

Source: Getty Images

16 of 16

15. Rhode Island

Income taxes in Rhode Island are low compared to the rest of the country, but the state is by no means tax-friendly. What residents gain by retaining more of their paychecks, they lose in the form of high sales and property taxes.


The Motley Fool has a disclosure policy.

Previous

Next