The Top 5 Most Tax-Friendly States

When it comes to taxes, not all states are equal. Unlike federal income tax, state taxes can be different state to state and county to county. In fact, the spread between the state with the highest tax and the lowest tax can be as much as 6%.

States all charge some sort of tax on their residents, but some states require residents to pay different rates and different taxes. For example, the majority of states require residents to pay income, property, and sales tax. But not all states require all taxes and not at the same rate.

Put simply, states with a high tax burden will require more taxes at higher rates. States with a low tax burden will require fewer taxes at lower rates.

So, where can you go to find the most tax-friendly states in the U.S.? The answers might surprise you.

1. Alaska

Taxes paid as percentage of income: 6.5%
Income tax collections per capita: $0

2. Wyoming

Taxes paid as percentage of income: 7.1%
Income tax collections per capita: $0

3. South Dakota

Taxes paid as percentage of income: 7.1%
Income tax collections per capita: $0

4.Tennessee

Taxes paid as percentage of income: 7.3%
Income tax collections per capita: $46

5. Louisiana

Taxes paid as percentage of income: 7.6%
Income tax collections per capita: $639.

Do you live in one of these states with a low tax?