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Good to Know: The Most “Tax Friendly” States In the US

Good to Know: The Most “Tax Friendly” States In the US

Reported by Victor O.

It is often said that the only two inevitable things in life are death and taxes. Taxes are seemingly inescapable, even though many people wish they could do without them. However, the burden of taxation differs from place to place.

Here are five of the most tax-friendly U.S. states to live in:

Alaska

About four decades ago, this state was one of the very least tax-friendly states in the United States. But today, Alaska is one of the most tax-friendly states in the country, with help from oil revenue and federal funds. The state does not collect income taxes, state sale taxes, or inheritance taxes. It gets more federal funding per capita than numerous other states. A significant amount of revenue is also made from taxes on oil and gas. The Alaska Permanent Fund is in charge of investing and redistributing royalties earned from oil companies in the state. The program paid each eligible resident a whopping $3,269 in 2008.

Nevada

This state does not collect personal or corporate income taxes. While its sales tax is not the lowest in the country, it is also not the highest. Property taxes are equally manageable. Nevada’s ability to generate needed revenue is helped by its business-friendly posture. In addition, money is made on sales from tourism as well as from entertainment-related taxes such as gambling.

Wyoming

Revered for its spectacular scenery, Wyoming is another state that does not have income taxes. It is also one of the best states to do business in the country, in that the state does not impose corporate income taxes or gross receipts taxes. Residents do not only pay just a fraction of a property’s actual value in property taxes, they are also well-protected, legally, from rising property tax rates. Estate tax is predicated on the federal estate tax, and there is no inheritance tax. In spite of all these tax advantages for residents, Wyoming still provides essential services as needed.

Florida

This rapidly-growing state has no personal income tax or inheritance tax. Corporate tax in Florida is flat and lower than what is obtainable in many other states. Property taxes collected put the state somewhere in the middle position in the country. Florida continues to try and keep taxes down by looking at other means of raising revenue, such as proposing a gambling deal with the Seminole tribe to enable the state to rake in more than $400 million.

New Hampshire

New Hampshire has a very simple and friendly tax system — a flat tax for all individuals. The state does not impose tax on earned income, but only on unearned one such as interest and dividends. Tennessee is the only other state that imposes personal income tax on only interests and dividends. There is also no sales tax required of New Hampshire residents. The state makes up for these perks with one of the highest property tax rates in the US.

Source 1, 2

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