I often hear about the benefits of living in one of the few US states that do not collect state income tax. However, I often wonder how the effects of other taxes compare in each state. How much does each state charge in sales tax and property tax?
For example… the three states (out of 8 total) that collect no state income tax at all are Florida, Texas, and Tennessee. Do they charge significantly more in state sales tax for the difference? What about property taxes? Is there a big discrepancy?
Is it really more convenient for the average person to live in a state that does not tax their income?
Variables prevent a challenge
As I did my research for this article and started digging into the numbers, it became abundantly clear that there are too many variables to determine a comparable number that will apply to anyone (or everyone).
Some states have fixed income tax rates where everyone pays the same percentage. Other states charge progressive variable income tax rates, where the percentage you pay is based on your income. This variable alone made this comparison nearly impossible to complete.
State sales tax also complicates matters, as some states have local jurisdictions (cities or counties) that charge separate sales taxes in addition to the state sales tax. Again, this variable makes this comparison very difficult.
Property taxes preclude the ultimate challenge, as these rates are generally set by local jurisdictions and not by the state. But, I felt that property taxes needed to be included in this comparison because everyone has to live somewhere. Even tenants pay property tax indirectly, so it applies to almost everyone.
Note: I intentionally ignored gas taxes for this comparison, since the world is moving toward more electric cars and the amount an average person spends on gas can vary greatly.
How I came up with the average family in the United States
I have created a spreadsheet in Google Sheets with 5 different tabs (sheets) as follows…
I used the median household income for each state. The sales tax data lists the average sales tax rate for each state, so I used that and calculated based on a made assumption that each household spends 15% of its income on products that are subject to sales tax. The income tax at each income level is accurate based on the default variables in the IRS calculator I used. Property taxes are actual averages based on average home prices in each state.
States with the highest overall taxes for the average US household
Congratulations to New Jersey, Connecticut, and Illinois for making the top 3 for being the highest taxed states for the average family! The Big Apple (New York) placed fourth overall. To my surprise, California didn’t even make the top 10!
| condition | middle income | State Income Tax | sales tax | Average property tax | total tax |
| new jersey | $85,245 | $3,241.91 | $844 | $5,419 | $9,504.84 |
| Connecticut | $79,855 | $3,942.03 | $761 | $4,658 | $9,360.65 |
| Illinois | $68,428 | $3,272.10 | $904 | $4,942 | $9,118.38 |
| New York | $71,117 | $3,532.50 | $909 | $3,749 | $8,190.38 |
| Massachusetts | $84,385 | $3,999.25 | $791 | $2,667 | $7,457.36 |
| Minnesota | $73,382 | $4,068.26 | $824 | $2,429 | $7,321.71 |
| Wisconsin | $63,293 | $2,760.81 | $516 | $4,027 | $7,303.33 |
| Iowa | $61,836 | $3,109.48 | $644 | $3,407 | $7,160.19 |
| District of Columbia | $90,842 | $5,054.82 | $818 | $1,221 | $7,093.40 |
| Hawaii | $83,173 | $5,839.49 | $554 | $606 | $6,999.42 |
States with the lowest overall taxes for the average US household
Congratulations to Wyoming, Nevada and Tennessee for being the top 3 states to live in for the average family in terms of paying the lowest overall taxes. Florida and Alaska were not far behind in 4th and 5th place.
| condition | middle income | State Income Tax | sales tax | Average property tax | total tax |
| Wyoming | $65,304 | $0.00 | $511 | $1,319 | $1,830.33 |
| Nevada | $62,043 | $0.00 | $766 | $1,310 | $2,075.92 |
| Tennessee | $54,833 | $0.00 | $785 | $1,548 | $2,333.48 |
| Florida | $57,703 | $0.00 | $607 | $1,934 | $2,540.75 |
| Alaska | $77,790 | $0.00 | $205 | $2,599 | $2,804.37 |
| Arkansas | $49,475 | $1,084.53 | $703 | $1,358 | $3,145.32 |
| Washington | $77,006 | $0.00 | $1,073 | $2,134 | $3,207.08 |
| Louisiana | $50,800 | $1,414.25 | $728 | $1,187 | $3,328.96 |
| South Dakota | $59,896 | $0.00 | $575 | $2,857 | $3,432.00 |
| North Dakota | $65,315 | $657.20 | $682 | $2,138 | $3,477.09 |
State income tax matters!
I’ll admit – I was a little surprised at the final numbers after I finished the calculations. I thought states with low (or no) income taxes must compensate for the disparity by charging much higher sales taxes and property taxes. As it turns out, 7 of the 8 states with zero income tax make it to the top 10, including 5 of the top 5 spots! Texas is the only income tax state that did not make the top 10 on this list.
Want to see all the data? Click here to access the view-only version of my Google Sheets.
Pay less in taxes by living in a certain state
The bottom line is this… if you don’t already live in a state that charges the lowest taxes and you’re open to considering a move… you might want to consider one of the states that charge the lowest overall taxes.
After all – it’s always wise to keep as much of your money as possible out of the hands of governments, who are notorious for their ability to misuse money.
Remember – these numbers were calculated using fuzzy averages and made assumptions. be sure Calculate your own numbers based on certain variables before making big life decisions, such as moving to another state Just because some random blogger published some numbers. Ha ha ha ha
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