23 States With the Least Expensive Taxes

In a nation where taxes can heavily impact your financial health, choosing a state with the lowest taxes can be a game-changer.
States like Wyoming and Alaska offer more than just breathtaking landscapes—they present significant savings through lower tax obligations. Meanwhile, states like Texas and Florida are drawing those seeking to maximize their income without the burden of state income tax.
Understanding which states have the lowest taxes is essential for anyone looking to optimize their financial future.
Wyoming

Wyoming boasts no state income tax, making it an attractive option for residents seeking to maximize their earnings. The state also has one of the lowest property tax rates in the country, with an average effective rate of just 0.57%. Combined with its lack of a corporate income tax, Wyoming is a tax haven for both individuals and businesses.
Alaska

Alaska is known for its generous tax policies, including no state income tax and no state sales tax. Residents also benefit from the Alaska Permanent Fund, which provides annual dividend payments from the state’s oil revenue. The absence of these major taxes makes Alaska one of the most tax-friendly states in the U.S.
Florida

Florida is a popular destination for those looking to escape high taxes, as it has no state income tax. The state relies heavily on sales tax and tourism-related taxes to generate revenue, allowing residents to keep more of their income. This tax structure, combined with the warm climate, makes Florida a magnet for retirees and high earners.
South Dakota

South Dakota offers a tax-friendly environment with no state income tax and low property taxes. The state’s average effective property tax rate is 1.14%, well below the national average. South Dakota’s favorable tax policies make it an appealing option for both retirees and entrepreneurs.
Texas

Texas is one of the largest states with no state income tax, making it a top choice for those looking to reduce their tax burden. While property taxes in Texas are relatively high, the lack of income tax more than compensates for many residents. Texas also has a strong economy, attracting businesses and individuals alike.
Nevada

Nevada is another state with no income tax, appealing to residents and businesses looking to minimize their tax obligations. The state relies on tourism and gambling taxes, which means residents benefit from low tax rates. Nevada’s favorable tax climate is particularly attractive to retirees and those in the entertainment industry.
Tennessee

Tennessee recently eliminated its tax on interest and dividend income, making it a no-income-tax state. The state also has low property taxes, with an average effective rate of 0.64%. Tennessee’s favorable tax environment is a key reason why it is becoming an increasingly popular destination for new residents.
Washington

Washington state does not impose an income tax, making it a desirable location for high earners. The state relies on a combination of sales and excise taxes to generate revenue. Despite having higher sales tax rates, Washington’s lack of income tax makes it a financially attractive option for many residents.
New Hampshire

New Hampshire is unique in that it has no state income tax and no state sales tax, although it does tax interest and dividend income. The state also has some of the highest property taxes in the country, but the lack of other major taxes still makes it a tax-friendly state overall. New Hampshire’s tax structure appeals to those who prioritize keeping their earned income intact.
Delaware

Delaware has no state or local sales tax, making it a haven for shoppers and businesses alike. While the state does have an income tax, it offers relatively low property taxes, with an average effective rate of 0.59%. Delaware’s favorable tax policies make it an attractive option for both residents and corporations.
Montana

Montana does not have a state sales tax, allowing residents to keep more money in their pockets. The state does have an income tax, but it offers relatively low property taxes and a low overall tax burden. Montana’s tax-friendly environment is appealing to both individuals and businesses looking to minimize expenses.
North Dakota

North Dakota offers low property taxes and a moderate state income tax rate. The state’s average effective property tax rate is 1.01%, and its income tax rates range from 1.1% to 2.9%. These favorable tax policies, combined with a strong economy, make North Dakota a desirable place to live.
Oregon

Oregon does not have a state sales tax, making it an attractive option for residents who want to avoid extra costs on goods and services. The state does have an income tax, but its lack of sales tax makes it one of the most tax-friendly states for consumers. Oregon’s beautiful landscapes and tax advantages make it a popular choice for new residents.
Colorado

Colorado offers a flat income tax rate of 4.55%, which is relatively low compared to other states. The state also has low property taxes, with an average effective rate of 0.49%. Colorado’s combination of a reasonable income tax rate and low property taxes makes it a financially attractive option for many.
Georgia

Georgia has a moderate income tax rate, but it makes up for this with relatively low property taxes and no state-level estate tax. The average effective property tax rate in Georgia is just 0.87%, making homeownership more affordable. Georgia’s balanced tax structure appeals to both retirees and working professionals.
Indiana

Indiana has a flat income tax rate of 3.23%, which is among the lowest in the nation. The state also has low property taxes, with an average effective rate of 0.81%. Indiana’s tax policies make it an appealing choice for individuals looking to reduce their overall tax burden.
Arizona

Arizona offers a progressive income tax rate that maxes out at 4.5%, combined with low property taxes. The average effective property tax rate in Arizona is 0.62%, making it one of the more affordable states for homeowners. Arizona’s warm climate and tax advantages make it a popular destination for retirees.
South Carolina

South Carolina has a low property tax rate, with an average effective rate of just 0.56%. The state also offers a top income tax rate of 7%, but many deductions and exemptions help lower the overall tax burden for residents. South Carolina’s favorable tax environment is one of the reasons it is attracting more new residents.
Alabama

Alabama offers some of the lowest property taxes in the country, with an average effective rate of just 0.40%. The state also has a moderate income tax rate, making it a financially attractive option for residents. Alabama’s low cost of living, combined with its favorable tax policies, makes it an appealing choice for many.
Mississippi

Mississippi has one of the lowest tax burdens in the United States, with low property taxes and a moderate income tax rate. The average effective property tax rate is just 0.81%, making homeownership more affordable. Mississippi’s tax-friendly environment is appealing to both retirees and young families.
Louisiana

Louisiana offers relatively low property taxes, with an average effective rate of 0.55%. The state also has a moderate income tax rate, making it a financially viable option for residents. Louisiana’s combination of low property taxes and a reasonable income tax rate makes it a tax-friendly state.
Missouri

Missouri has a low cost of living and favorable tax policies, including a moderate income tax rate and low property taxes. The state’s average effective property tax rate is just 0.97%, which is below the national average. Missouri’s tax structure appeals to those looking for a balance between tax savings and affordable living.
Kentucky

Kentucky offers relatively low property taxes, with an average effective rate of 0.83%. The state also has a progressive income tax system with a top rate of 5%, which is lower than many other states. Kentucky’s favorable tax policies make it an attractive option for both retirees and working professionals.