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The 10 Most Tax-Friendly States in the U.S.

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The economy is looking better for workers these days. Unemployment rates are low, job growth is strong and wages are increasing. Still, to get a better job, you sometimes have to pack your bags and move across state lines.

But before you accept a job offer in another state, make sure you check out the cost of living in your prospective employer’s city. You’ll want to look at the cost of housing, of course, but you should consider the impact of state and local taxes on your bottom line, too. As our annual State-by-State Guide to Taxes shows, state tax rates are literally all over the map—and the difference between living in a high-tax or a low-tax state can be thousands of dollars each year, depending on your tax situation.

To help you determine how big of a tax bite each state would take out of your hard-earned cash, we estimated the tax burden in each state for a hypothetical married couple with a combined earned income of $150,000, $10,000 in dividend income, two dependents and a $400,000 home (with a mortgage). Based on our findings, we updated our list of the 10 most tax-friendly states in the U.S. for 2019 (starting with the most-friendly state). If you’re taking a job in another state, or relocating for other reasons, you’ll want to check it out to see if your state taxes are likely to go up or down after the move.

1. Wyoming
STATE INCOME TAX: None
EFFECTIVE INCOME TAX RATE: 0%
AVERAGE STATE AND LOCAL SALES TAX: 5.32%
AVERAGE PROPERTY TAX: $635 per $100,000 in home value
GAS TAXES AND FEES: 24 cents per gallon

2. Nevada
STATE INCOME TAX: None
EFFECTIVE INCOME TAX RATE: 0%
AVERAGE STATE AND LOCAL SALES TAX: 8.14%
AVERAGE PROPERTY TAX: $693 per $100,000 in home value
GAS TAXES AND FEES: 33.78 cents per gallon

3. Tennessee
STATE INCOME TAX: 2% on interest and dividends
EFFECTIVE INCOME TAX RATE: 0%
AVERAGE STATE AND LOCAL SALES TAX: 9.47%
AVERAGE PROPERTY TAX: $768 per $100,000 in home value
GAS TAXES AND FEES: 27.4 cents per gallon

4. Florida
STATE INCOME TAX: None
EFFECTIVE INCOME TAX RATE: 0%
AVERAGE STATE AND LOCAL SALES TAX: 7.05%
AVERAGE PROPERTY TAX: $1,041 per $100,000 in home value
GAS TAXES AND FEES: 41.99 cents per gallon

5. Alaska
STATE INCOME TAX: None
EFFECTIVE INCOME TAX RATE: 0%
AVERAGE STATE AND LOCAL SALES TAX: 1.76%
AVERAGE PROPERTY TAX: $1,234 per $100,000 in home value
GAS TAXES AND FEES: 14.66 cents per gallon

6. Washington
STATE INCOME TAX: None
EFFECTIVE INCOME TAX RATE: 0%
AVERAGE STATE AND LOCAL SALES TAX: 9.21%
AVERAGE PROPERTY TAX: $1,125 per $100,000 in home value
GAS TAXES AND FEES: 49.4 cents per gallon

7. South Dakota
STATE INCOME TAX: None
EFFECTIVE INCOME TAX RATE: 0%
AVERAGE STATE AND LOCAL SALES TAX: 6.4%
AVERAGE PROPERTY TAX: $1,388 per $100,000 in home value
GAS TAXES AND FEES: 30 cents per gallon

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