topsverseWhen my senior sister sold his California house last spring and moved to Nevada, I thought he was crazy. Six months later, after seeing his property tax bill compared to mine, I am starting to wonder if he is the smart one here.
This whole tax migration thing is not just rich people bragging about their accountants anymore—regular folks are packing up and moving based on where they can keep more of what they earn.
I spent the last few months diving into WalletHub’s latest data on effective tax burdens because, frankly, watching my paycheck disappear to various government entities has gotten old.
What I found surprised me. Some states I expected to see on this list are nowhere near the top, while others I had never considered are absolute goldmines for keeping your hard-earned cash.
10 Most Tax-Friendly States in United State
10. Nevada (7.37% effective tax burden)
Nevada works because tourists subsidize residents. All those people losing money at slot machines and buying overpriced drinks on the Strip help keep your taxes low. No income tax, reasonable property taxes, though you will pay more when shopping.
The catch? Housing costs have exploded in recent years, especially around Reno and Las Vegas. That tax savings might disappear into your mortgage payment.
9. Oklahoma (7.04% effective tax burden)
Oklahoma surprised me. Low income tax rates, modest sales taxes, and some of the lowest property taxes in the country. I know someone who moved from suburban Chicago to Tulsa and cut his total tax bill by almost $15,000 annually. The trade-off is obvious—you are living in Oklahoma, not Chicago—but if remote work is your thing, the math works.
8. North Dakota (6.80% effective tax burden)
Oil money changes everything. North Dakota can afford low taxes across the board because energy companies pay hefty extraction fees. The winters are brutal, but your bank account will appreciate the warmth of those tax savings.
7. South Dakota (6.44% effective tax burden)
No income tax whatsoever, which means your W-2 stays intact. The sales tax hits 6.11% when you combine state and local rates, so budget accordingly for major purchases. I met a small business owner last year who moved his company headquarters here specifically for the tax benefits. His corporate tax bill dropped to almost nothing.
6. Delaware (6.43% effective tax burden)
This one shocked me. Delaware has an income tax, but zero sales tax. Think about that for a second—every purchase you make, from groceries to cars to electronics, costs exactly the sticker price. No tax math at the register. For retirees especially, this can add up to serious savings since they are spending down assets rather than earning high incomes.
5. Tennessee (6.07% effective tax burden)
Tennessee’s popularity explosion makes sense now. No income tax means your entire paycheck comes home with you. The flip side is a combined sales tax that can hit nearly 10% in some areas.
Here is a 2025 update that caught my attention: they now tax short-term rental stays differently, adding a local occupancy tax for the first 30 days regardless of rental length. If you are planning to Airbnb your way through a move, factor this in.
4. Florida (6.05% effective tax burden)
Florida’s tax advantages got even better this year. Beyond the famous lack of income tax, they permanently eliminated sales taxes on admission charges and event tickets as of June 30, 2025. Theme park tickets, concerts, even state park fees are now tax-free. For families who actually use these things, the savings add up.
The property tax situation varies wildly by county, though. Miami-Dade will hit you hard, while rural counties barely touch your wallet.
3. Wyoming (5.70% effective tax burden)
Wyoming ranks first in the Tax Foundation’s business competitiveness index, and for good reason. No income tax, reasonable sales tax at 5.56%, low property taxes. They even reduced their coal severance tax in 2025, from 6.5% to 6%.
The population is sparse for a reason—harsh weather and limited job opportunities outside energy and ranching. But if you can work remotely, Wyoming treats your wallet very well.
2. New Hampshire (5.63% effective tax burden)
New Hampshire has the lowest sales and excise tax burden in America at 0.92% of income, because they basically do not have a sales tax. They also skip the income tax, except for a narrow tax on investment income.
The gotcha is property taxes. They are among the highest in the nation because the state has to fund itself somehow. If you rent or own a modest home, you win big. Own a $500,000 house? Your savings evaporate quickly.
1. Alaska (4.93% effective tax burden)
Alaska is in a league of its own. No income tax. Sales tax averages just 1.82%. Property taxes are minimal—some counties charge less than $250 annually. Plus, residents get the Permanent Fund Dividend, essentially a check from the state every year thanks to oil revenue.
The trade-off is brutal: Alaska has one of the highest costs of living in America. Groceries, gas, utilities—everything costs more when you live that far from the lower 48. But purely from a tax perspective, nothing beats Alaska.
What To Do If You Are Actually Considering a Move
Talk to a tax professional first. They can model your specific situation across different states and show you real dollar impacts. Generic rankings only tell part of your story.
If you do move, establish domicile properly. Get that new driver’s license, voter registration, and vehicle registration immediately. Update your employer’s payroll system. Tax authorities love going after people who claim residency in low-tax states but maintain ties to high-tax ones.
Remember that remote work tax rules favor contractors and freelancers, who can deduct home office expenses and business costs. W-2 employees lost most of those deductions under the 2017 tax law changes.
Conclusion
These rankings show where taxes take the smallest bite of your income, but moving is about more than tax optimization. Consider career opportunities, family proximity, climate preferences, and lifestyle fit alongside the financial benefits.
That said, if you are already thinking about relocating, why not choose a place that lets you keep more of what you earn? Just do not expect tax savings to solve all your financial challenges—sometimes a higher-tax state with better job opportunities leaves you better off overall.
The tax game is changing as more people work remotely and states compete for residents. These rankings will shift, but the principle remains: understanding where your money goes helps you make smarter decisions about where you go.