Who doesn’t want to live tax-free?
Taxes are, for lack of a better term, and economic standpoint, a necessary evil. They fund roads and bridges and schools and all the other infrastructure we don’t think about when we use them.
Unless you’re a corporation with clever lawyers, taxes apply to everyone. And there’s no way to get away from what Uncle Sam wants on the federal level. States are a bit different, however. Many have little to no income taxes. Here are nine, and we will break down the costs of everything else, too.
Alaska
Alaska doesn’t tax income or sales, but its property taxes are steep, making up 3.54% of its total tax burden of 4.93%. Living here isn’t cheap either — groceries, utilities, and gas prices are high. It also ranks dead last for quality of life, thanks to harsh winters and remote living conditions.
- Total tax burden: 4.93%
- Cost of living index: 123.4 (U.S. average = 100)
- Quality of life rank: 50
- Median home price: $379,600
Nevada
Nevada loves its tourism dollars, taxing everything from hotel stays to gambling and alcohol. Its tax burden sits at 7.37%, and while there’s no income tax, the cost of living—especially housing and groceries—can be expensive. Gas prices are among the highest in the country.
- Total tax burden: 7.37%
- Cost of living index: 100.1
- Quality of life rank: 22
- Median home price: $428,100
Wyoming
Wyoming has some of the lowest property and sales taxes in the country, keeping its total tax burden at 5.70%. The cost of living is about average, but the state’s quality of life rank is low, making it a trade-off.
- Total tax burden: 5.70%
- Cost of living index: 100.1
- Quality of life rank: 39
- Median home price: $276,000
South Dakota
Sales and excise taxes make up the bulk of South Dakota’s 6.44% tax burden, with property taxes filling in the gaps. While housing is relatively affordable, the state ranks poorly for quality of life, and other costs—like utilities and transportation—are higher than average.
- Total tax burden: 6.44%
- Cost of living index: 101.2
- Quality of life rank: 40
- Median home price: $302,800
New Hampshire
New Hampshire leans heavily on property taxes, which make up 4.51% of its 5.63% total tax burden—one of the highest in the country. While it avoids income and sales taxes, the overall cost of living is high.
- Total tax burden: 5.63%
- Cost of living index: 111.5
- Quality of life rank: 38
- Median home price: $452,700
Tennessee
Tennessee eliminated its tax on investment income in 2021, leaving only a hefty sales tax of 9.55%. However, the cost of living is relatively low, with housing remaining affordable compared to the national average.
- Total tax burden: 6.07%
- Cost of living index: 90
- Quality of life rank: 33
- Median home price: $377,200
Washington
Washington is home to major companies like Amazon and Microsoft, partially because it lacks a corporate income tax. While there’s no personal income tax, investment income and capital gains are taxed for high earners. Gas and home prices are steep, and the state has the highest overall tax burden of any income tax-free state.
- Total tax burden: 8.04%
- Cost of living index: 113.6
- Quality of life rank: 9
- Median home price: $618,000
Texas
Texas makes up for its lack of an income tax with high property taxes, ranking second-highest among states without one. However, it remains relatively affordable, especially when it comes to housing and groceries. Gas prices are among the lowest in the country.
- Total tax burden: 7.56%
- Cost of living index: 92.6
- Quality of life rank: 8
- Median home price: $357,800
Florida
Florida’s tax balance makes it a popular choice for retirees and transplants alike. While property taxes and state fees keep it running, the total tax burden is still relatively low. That said, the cost of living — especially for housing and utilities — is higher than average.
- Total tax burden: 6.05%
- Cost of living index: 102.4
- Quality of life rank: 4
- Median home price: $407,200
Should you move there?
Moving to a state without an income tax can be a smart financial move, but it’s not always the full picture. These states still need revenue, and they often make up for it with higher property taxes, sales taxes, or fees.
Your best bet? Consider all factors — cost of living, housing, gas prices, and so on — before making a move. What works for one person might not work for another, so weigh the trade-offs carefully to make sure you’re getting the best deal for your wallet and lifestyle.
