States with no income tax and the lowest tax burdens
So far, through research, we have come to the conclusion that in 80% of cases the reason for moving is the same. This mainly includes living expenses, which include basic living expenses, utilities, rent, but also income taxes, etc. In search of low living costs, people decide to look for a new place to live. And states with no income tax and the lowest tax burdens are often among the first states on their list. Currently, in the USA you can find 7 states that don’t charge income tax to their residents. And choosing such a state as a new place to live can be a good financial move. So, today, in this moving guide we will meet you with the most affordable states for life. Let’s see!
People searching for affordable places to live
People have always looked for favorable options for all situations in life. Regardless of whether it’s about housing, shopping, moving services, or choosing a place to live. The situation is exactly the same today. We can even say that it’s worse. Especially after the Covid 19 pandemic, which left great consequences for the whole world. And one of the consequences is the increase in utility bills, utilities, rents, tax rate increase, as well as the price of real estate. When the budget can no longer support it, people often think about changing their job, but also changing their place of residence. And even when it comes to retirement, seniors decide to look for the best US cities to retire to. And an ideal city for retirees must have a very favorable cost of living.
Another reason for moving that is related to living expenses is new business offers. When you get a new business offer, it always comes with an increase in salary, benefits, and allowances, right? This is one of the also frequent reasons. And what forces people to accept a new offer is higher earnings and career advancement. But, if they can choose, they will again choose one of the states with no income tax.
States with no income tax
So, we said that there are 7 states with no income tax. Maybe one of them will be your new place to live? We will introduce you to all the features of these states that will help you make the final choice. Well, let’s see!
- South Dakota
Speaking of these states, there is some interesting information that you should know. The mentioned states generally don’t charge income tax to their citizens, while Washington does charge income tax on income derived from investments and capital gains. But that only applies to those who earn large sums of money. Also, states that don’t charge income tax often find other ways to compensate. And the way to compensate is often some other taxes or a reduced choice of services. And another important piece of information when it comes to Alaska is that this state had the lowest tax burden, and at the same time it was the most favorable state to live in.
Alaska – The most favorable state for living without income tax
Alaska is perhaps one of the coldest states in the USA, but it’s also a state that offers you many options. Especially for work. What is characteristic of this state is its natural beauty, wild animals, various activities, and adventures. Also, it’s known that people from all over the world immigrate to Alaska precisely because of the business opportunities. The minimum wage in Alaska is about $10.90 per hour, while the highest-paid job, the job of a surgeon, is about 336,900, and according to that, Alaska is in first place.
When it comes to Alaska taxes, the situation is very interesting. In Alaska, corporate income tax ranges from 2.0 to 9.40 percent. Also, there is no state sales tax, but there is a local sales tax rate of 7.50 percent. Also, the combined state and local sales tax rate is 1.76 percent. When it comes to Alaska’s tax system, it ranks third on our state tax climate index for 2022, making it a very favorable state to live in and do business.
If you are planning to move to Alaska, it will be useful for you to know that real estate in 2022 increased by 10.3% compared to 2021. Now the average price of a house in Alaska is about $370,000. Also, Alaska has some of the best cities for Millenials in the USA. And what makes it favorable for the life of millennials are precisely the business opportunities as well as favorable living expenses.
Florida – One of the most popular states with no income tax
We all already know that Florida is one of the favorite states for all people, but at the same time, it’s also one of the most favorable states to live in. Also, during one year about 330,000 people move to Florida. And if you are planning a move to this sunny country, start with preparations and take care of moving insurance. Florida is a sunny country, and its other name is the Sunshine State. Its main feature is the sandy beaches that attract hundreds of thousands of tourists every year. And tourism is precisely one of the main activities of this country.
When we talk about life in this state, one of the leading features is that Florida has no income tax. When we talk about life in Florida and its affordability, it’s important to note that it ranks 31st when it comes to affordable housing options. But because of the other benefits it offers, Florida ranks 10th on the “Best States to Live” list. Since Florida has no income tax, it charges sales tax and excise taxes. And it has the lowest tax burden of 6.19%, which is below the national average.
Nevada – A state with a very strong economy
When talking about Nevada, it’s important to mention that this state is ranked as the 17th most expensive and 20th best state to live in the USA. What is characteristic of this country is that its economy is based on tourism and gambling. In fact, these are the two main things that make the economy of Nevada very strong and stable. But the residents of Nevada say that this state is expensive to live in. The cost of living in Nevada is about $2,090 per month, and it also has a low tax burden of 8.23%.
Nevada’s economy relies heavily on sales taxes. These are mainly taxes on the purchase of clothes and non-food items, taxes on gambling, but also on alcohol. And besides, the highest taxes are on hotel and casino services. But, all things considered, Nevada still ranks favorably and 22nd out of 50 states in the US. Nevada’s economy is trying to spend the largest amount of money on health and education. Spending per student/pupil in Nevada was about 9,344, while 6,714 was spent on health care per inhabitant. In relation to all the benefits of Nevada, Las Vegas can stand out as one of the top US cities for singles. And that’s precisely because of the entertainment that this city of sin offers.
South Dakota – A state with many life benefits
When we talk about South Dakota, we can safely say that it’s one of the best states to live in. If you are looking for a place that will offer you the greatest choice of life possibilities, then consider that you have found it. And now, you can find your residential movers and start the process of all the moving. South Dakota is a state that offers you:
- A strong economy
- A large selection of business opportunities
- Fun things to do
- Fairly low cost of living
- Many housing options
- favorable real estate
- Outstanding education and healthcare
- Exemption from sale income taxes
What is characteristic of South Dakota is the low tax burden. The economy of South Dakota is most affected by taxation on cigarettes and alcohol, and it’s one of the most important revenues for this state. South Dakota is home to several major companies in the industry, and due to property and sales taxes, residents of the state are also exempt from income taxes. Residents of this state pay only 7.37% of their annual income, which ranks South Dakota 14th. place in terms of accessibility and 15th on the list of “Best States”.
Texas is also one of the states with no income tax and the lowest tax burdens
Texas is another state in a series of tax-friendly states. Above all, this state is a great place to live. Also, when you are looking for the best cities for your new home, think about the cities in Texas. What makes this place favorable are business opportunities, high annual incomes, and multi-housing options. Also, when we compare Florida and Texas, we can safely say that it’s a little cheaper to live in, but it’s just as sunny and warm as Florida.
We mentioned that Texas is one of the most tax-friendly states, and its total tax burden is 8.19%. Also, one of the interesting pieces of information is that income taxes in Texas are prohibited by the state constitution. And what the economy of Texas relies on is the income from sales and excise taxes. But, regardless of taxes, the tax in Texas is still the lowest in the entire USA and based on that, this state is in 19th place. Also, one important piece of information is that the tax is limited to $10,000 for state and local tax (SALT) deductions imposed by the Tax Cuts and Jobs Act. And this state can be distinguished from states with high taxes, such as California and New York.
Tennessee and Wyoming are also tax-friendly states
Wyoming and Tennessee are currently the two best countries to live in. Precisely because their tax burden is the lowest on this list. The tax burden for Wyoming is 6.14% and for Tennessee, it’s 5.74%. What is characteristic of these two states is that they are completely different when it comes to the ethnic composition of the population, but at the same time they are one of the favorite states for newcomers. And in these two states, you can find some of the best cities for families. Consider these options!
Wyoming is the second most populous state in the USA, and citizens of this state are exempt from paying personal or corporate state income tax. What is characteristic is that Wyoming can be compared with Alaska because both states tax some of the natural resources such as oil. In this way, they make up for the lack of taxes from which citizens are exempted.
Tennessee, as one of the states with the lowest tax burden, makes up for the lack of taxes by charging high sales taxes. And by far the highest tax is on beer compared to other states in the Union. The cost of the tax is $1.29 per gallon. And based on its low tax burden, Tennessee ranks second in the US. Tennessee is considered one of the best states for young professionals and all those who want to work and advance in their careers. Also, if you decide to move to one of these states with no income tax, you will be expected to pay some fees when it comes to moving costs. It would be ideal if you would consider them.