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States With Lowest Taxes 2021

We’ve all heard the adage, “Nothing is certain except death and taxes.” We all know that we have to pay taxes if we live in the United States, but did you know that some states have lower tax rates than others? Some states also may eliminate certain taxes, but often, they’re merely paying more in other types of taxes.

Adult citizens in the United States pay a variety of different taxes. We pay taxes to the federal government. We also pay local and state taxes. It isn’t just your annual state tax return, either. We pay property taxes, sales taxes, and other taxes that help fund things like schools, roads, and critical infrastructure.

Because there are so many different types of taxes, there isn’t just one list of states with the lowest tax rates. For example, property tax in one state may be much lower, but personal income tax may be much higher. But we can break down the states with the lowest taxes based on tax type.

Property Tax

Unfortunately, all states have property taxes. Luckily, 28 states have property tax rates below 1.00%. The ten states with the lowest property tax rates are:

There are four states with property tax rates above 2.00%: New Jersey, Illinois, New Hampshire, and Connecticut.

Income Tax

In addition to federal income tax, every state has its own policy for collecting income taxes. Unlike property taxes, several states have no state income tax. These states are:

Sales Tax

When it comes to sales tax, five states do not have charge sales tax. Those states are:

It’s important to note that local municipalities in Montana and Alaska can impose a sales tax.

Here are the 10 states with the lowest income taxes:

  1. Wyoming (0.00%)
  2. Washington (0.00%)
  3. Texas (0.00%)
  4. Tennessee (0.00%)
  5. South Dakota (0.00%)
  6. New Hampshire (0.00%)
  7. Nevada (0.00%)
  8. Florida (0.00%)
  9. Alaska (0.00%)
  10. North Dakota (2.90%)

States With Lowest Taxes 2021

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States With Lowest Taxes 2021

* Rank based on normalized and combined rates for single filers with no dependents or deductions. Income tax is weighted 70%; sales tax at 30%.
State Income Tax Sales Tax Property Tax (per $100K)
Wyoming0.00%4.00%$635
Washington0.00%6.50%$1,125
Texas0.00%6.25%$1,993
Tennessee0.00%7.00%$768
South Dakota0.00%4.50%$1,388
New Hampshire0.00%0.00%$2,296
Nevada0.00%6.85%$693
Florida0.00%6.00%$1,941
Alaska0.00%0.00%$3,231
North Dakota2.90%5.00%$894
Pennsylvania3.07%6.00%$1,674
Indiana3.23%7.00%$1,207
Michigan4.25%6.00%$1,729
Colorado4.55%2.90%$1,756
Ohio4.80%5.75%$1,641
Utah4.95%6.10%$713
Illinois4.96%6.25%$4,419
Oklahoma5.00%4.50%$974
Mississippi5.00%7.00%$862
Massachusetts5.00%6.25%$1,294
Kentucky5.00%6.00%$925
Alabama5.00%4.00%$587
North Carolina5.25%4.75%$894
Missouri5.40%4.22%$1,026
Kansas5.70%6.50%$1,491
Virginia5.75%5.30%$858
Maryland5.75%6.00%$1,125
Georgia5.75%4.00%$1,623
New Mexico5.90%5.13%$830
Arkansas5.90%6.50%$798
Rhode Island5.99%7.00%$1,723
Louisiana6.00%4.45%$555
West Virginia6.50%6.00%$615
Delaware6.60%0.00%$1,431
Nebraska6.84%5.50%$1,855
Montana6.90%0.00%$892
Idaho6.92%6.00%$1,456
Connecticut6.99%6.35%$5,898
South Carolina7.00%6.00%$601
Maine7.15%5.50%$1,424
Wisconsin7.65%5.00%$615
Arizona8.00%5.60%$1,499
Iowa8.53%6.00%$1,678
Vermont8.75%6.00%$1,908
New York8.82%4.00%$1,812
Minnesota9.85%6.88%$1,224
Oregon9.90%0.00%$1,121
New Jersey10.75%6.63%$2,530
Hawaii11.00%4.00%$1,715
California13.30%7.25%$3,818

States With Lowest Taxes 2021