The 10 Best States For Taxes
State sales tax: 4 percent
State income tax: none
Per capita property tax: $2,633
Despite relatively high property taxes, Wyoming still takes the top spot because of its lack of corporate or income taxes, and its low 4 percent sales tax rate. Looks like taxes in the Cowboy State are going to stay low: A recent report by the Mercatus Center at George Mason University ranked its overall fiscal condition second in the country (after Alaska).
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State sales tax: 4 percent
State income tax: 0 percent
Per capita property tax: $1,142
Like Wyoming, South Dakota has no individual or corporate income taxes and a low individual sales tax rate, but its sales tax on business purchases keeps it out of the top spot. The state is also among only 12 that levy taxes on intangible personal property, such as stocks and bonds.
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State sales tax: 6.85 percent
State income tax: 0 percent
Per Capita property tax: $1,297
Despite it’s relatively high property and sales taxes, Nevada still ranks high because of its lack of a state income tax. Part of the reason the state is able to keep taxes so low for residents is that it charges a “live entertainment tax,” which charges tourists and others who spend money for shows at the state’s casinos.
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State Income tax: 0 percent
State sales tax: 0 percent
Per capita property tax: $1,865
Alaska has a “particularly burdensome” corporate income tax, according to the Tax Foundation, but it’s lack of a state income or sales tax means it still ranks fourth best on this list. Some municipalities do levy a local sales tax, at an average 1.79 percent, among the lowest in the country. The state’s able to keep taxes so low, due to its strong fiscal condition: Alaska ranked first in the Mercatus Center report comparing the fiscal status of the states.
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State income tax: 0 percent
State sales tax: 6 percent
Per capita property tax: $1,507
This retiree haven imposes no individual income tax, but comes in at number 5 on the list because it requires companies to pay an alternative minimum tax, which mirrors the federal AMT. Like many states this year, Florida is actually facing a budget surplus, and Going into 2014, Florida is in the enviable position of having a $1 billion budget surplus, and lawmakers are looking at dozens of new measures to reduce fees and taxes.
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State income tax: 0 percent
State sales tax: 6.5 percent
Per capita property tax: $1,257
Washington is another state that makes the Top 10 list because it has no state income tax, even though it’s 6.5 percent sales tax is on the higher end, and it doesn’t do particularly well in corporate or property taxes. One constituency that is paying high taxes: Potheads. When it legalized marijuana this year, the Evergreen State included a 25 percent tax on the green stuff.
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State income tax: 6.9 percent
State sales tax: 0 percent
Per capita property tax: $1,296
Moving up one spot on the list this year, Montana has no sales tax and average property taxes and corporate taxes. It’s 6.9 percent income tax rate is relatively low, and it avoids the marriage penalty and other policies that can make the effective rate much higher. The state came in 9th on the Mercatus Center report comparing the fiscal status of states.
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State income tax: 5 percent, on interest and dividend income only
State sales tax: 0 percent
Per capita property tax: $2,463
New Hampshire fell one spot in this year’s ranking. Although it has one of the lowest income taxes in the country and no sales tax, it ranks poorly in property taxes and corporate taxes. The state is considering a change to its tax code that would remove tax-exempt status for hospitals, colleges and large nonprofits.
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State income tax: 5 percent
State sales tax: 5.95 percent
Per capita property tax: $837
Utah moved up one place in this year’s ranking, benefiting from its low property and sales tax rates, and a low single income tax rate. The Beehive State also avoids wealth levies such as estate, inheritance and gift taxes.
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State income tax: 3.4 percent
State sales tax: 7 percent
Per capita property tax: $1,182
Indiana moved onto the Top 10 list this year, knocking perennial tax haven Texas down to the 11th spot. The state has made mangy changes to its tax code in recent years. By 2017, its individual income tax rate will fall from its current 3.4 percent rate to 3.23 percent. The state also eliminated its inheritance tax this year.
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