The table below shows the differences between states that do not have an income tax. The first two columns reflect the state’s overall tax burden as a percentage of personal income (state income taxes + sales/excise taxes + property taxes), followed by the state’s ranking (best to worst) among all 50 states with ctc calculation and deduction under section 16.
State with No Taxes
|No-Tax State||Tax Burden (% of Income)||Tax Burden Rank (1=lowest)||Affordability (1=best)||Best State to Live in (1=best)
1. The state of Alaska
Alaska has neither a state-imposed tax nor a state-imposed sales tax. Alaskans have the lowest total state and local tax burden of the 50 states, at 5.10 percent of personal income, which includes income, property, sales, and excise taxes.
2. The state of Florida
Warm temperatures and a sizable retiree population characterize this favorite snowbird destination. Although Florida’s sales and excise taxes are higher than the national average, the overall tax burden is only 6.97 percent, contributing it the sixth-lowest in the country.
3. The state of Nevada
Nevada is highly reliant on hefty sales taxes on everything from groceries to clothing, as well as sin taxes on alcohol and gambling, and casino and hotel taxes.
Nevadans face an overall tax burden of 8.23 percent of personal income levied by the state.
4. South Dakota
like many other no-income-tax states, generates revenue through other means, such as taxes on cigarettes and alcohol.
The Black Hills, home of the Lakota Sioux, has one of the highest sales tax rates in the country, as well as higher-than-average property tax rates.
5. The state of Texas
The Lone Star State despises personal income taxes so much that it enacted a constitutional amendment prohibiting them.
25 However, because infrastructure and services must be paid for, Texas relies on sales and excise tax revenue to cover the costs.
6. Washington, D.C.
Due to the lack of a state-mandated corporate income tax, Washington has a young population, with only 15.9% of persons over the age of 65, and numerous big employers (note that high-income earners are subject to state capital gains tax). Residents are subject to high sales and excise taxes, and fuel in Washington is more expensive than in most other states.
is the second least densely inhabited state, with an estimated six persons per square mile, trailing only Alaska, which has around one person per square mile.
previously taxed investment income, such as most interest and dividends, but not wages. In 2016, legislation was passed that contained a proposal to reduce taxes on unearned income by 1% per year until the tax was abolished at the beginning of 2021.
Citizens are exempt from personal and corporate state income taxes, as well as retirement income taxes and modest sales taxes.
9. New Hampshire
Earned income has not been in taxation for New Hampshire, although dividends and interest are. The New Hampshire Senate voted legislation to gradually phase down the investment income tax over five years, with full implementation by 2027.