The 10 Most (and Least) Tax-Friendly States in America
Alaska, Wyoming, and South Dakota are the three states where taxes are lowest, according to a new analysis of tax rates that form the basis of a Yahoo! Finance infographic. The “State-by-State Guide to Taxes” comes from Kiplinger, a service that provides personal finance news and advice, and it demonstrates just how much taxes vary from state to state.
The types of taxes taken into account were those on income, property, sales, fuel, "sin" (alcohol, vapor, and tobacco products), inheritance and gifts, wireless, and travel. In creating the ranking, Kiplinger used a slew of data from the Tax Foundation, the U.S. Census American Community Survey, The American Petroleum Institute, and several other sources.
In addition to the three aforementioned Western/Midwestern states, three Southern states also fared well, tax-wise: Florida is the fourth most tax-friendly state, and Mississippi and Louisiana came in ninth and tenth, respectively.
If you’re looking to lessen your financial burden by moving somewhere with less aggressive tax rates, you’ll want to avoid the Northeast. Maryland, New York, Maine, Vermont, New Jersey, and Connecticut all made the top 10 for the most heavily taxed locales.
In addition to Yahoo!’s infographic, which breaks down the top 10 most and least tax-friendly states, Kiplinger also has an interactive map on its site that lets you click on an individual state’s profile for more information on various tax rates. The site also lists the states with no income tax (there are seven, plus two that only tax dividends and investment income) and the states with no sales tax (five in total).
Perhaps most importantly, if you want to know the states with the lowest beer taxes, Kiplinger has figured that out, too. (Beer lovers might want to head to Oregon, which not only has the most breweries per resident, but also some of the lowest beer taxes in the country.) And no matter where you're filing from, make sure you have the proper tools to do so, like Turbo Tax.
Keep scrolling to see the top 10 most and least tax-friendly states.
3. South Dakota
6. North Dakota
3. New York
9. New Jersey
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[h/t Yahoo! Finance]