5 Tax-Friendly States of 2020
The coronavirus pandemic, has led younger people, many of whom are in their prime career years, to also look for low-cost places to relocate. Retirees are often the main group we imagine moving from higher-tax states to states considered tax-friendly. Telecommuting has made it possible to leave big (often expensive) urban areas and work from anywhere, which is one factor behind the shift.
Here are 5 areas in the country's that are the most tax-friendly states right now, regardless of why you might be relocating.
Wyoming has no state income tax in, and the average state and local sales tax is just over 5.3%. The average property taxes are $635 per $100,000 in home value. Wyoming has a strong mineral and energy extraction industry, this helps to the state can keep taxes low for residents.
Nevada, has no state income tax in and the average property tax in the state is $693 per $100,000 in home value. The tax-friendly nature of Nevada may be one reason there's an influx of Californians moving to the state and the scenic Lake Tahoe area in particular. The casino and tourism industry, give over a billion dollars each year which helps them avoid imposing a state income tax.
Florida has no state income tax, but property taxes tend to hover around the national average. State and local sales tax rate is also somewhere around average for the country at 7.05% combined.
Alaska may not provide you with sunshine and beaches, but it could be an economically sound decision. Alaska residents pay neither state income taxes nor state sales tax. Certain municipalities in Alaska might impose local sales taxes that are as high as 7.5%, but even so, the average local sales tax hovers around 1.76%. There's also the Permanent Fund Dividend ($992 for 2020), which is paid to every Alaska resident who's lived there for a full year.
Prior to 2016, Tennessee did not tax wages, but still taxed income from investments and other "unearned income." Legislation was passed in 2016 to gradually eliminate taxes on investments by 2021. The state currently carries the third lowest tax-burden in the United States.