Tired of seeing your hard-earned money disappear into taxes?
We crunched the numbers and analyzed the latest data from the Tax Foundation and Kiplinger to bring you the top 10 states with the lowest tax burden for middle-income families in 2024.
We looked at everything from state income tax to property taxes, and even sales taxes on essential items like groceries, diapers, and feminine hygiene products. Here are some things you probably haven’t been told about these 10 tax friendly states.
1. Alaska
Alaska has no state income tax and no sales tax on essentials, making it the most tax-friendly state for middle-income families. The median annual household income in Alaska is $88,121, and the average amount spent on taxes is only 4.6% of that.
The only downside is that property taxes are relatively high, with a median annual amount of $3,117.
2. Wyoming
Wyoming is another state with no income tax and no sales tax on essentials. The median annual household income in Wyoming is $70,042, and the average amount spent on taxes is 7.5% of that. Property taxes are also low, with a median annual amount of $1,442.
3. Tennessee
Tennessee does not have a personal income tax, except for interest and dividends. It also has low property taxes, with a median annual amount of $1,120. However, it does have a high sales tax rate of 7%, which applies to essentials like diapers and feminine hygiene products. The median annual household income in Tennessee is $65,254, and the average amount spent on taxes is 7.6% of that.
4. South Dakota
South Dakota is another state with no income tax and no sales tax on essentials. The median annual household income in South Dakota is $69,728, and the average amount spent on taxes is 8.4% of that. Property taxes are moderate, with a median annual amount of $2,149.
5. Michigan
Michigan has a flat income tax rate of 4.25%, which is lower than most states. It also has low sales tax rates of 6%, which do not apply to groceries. The median annual household income in Michigan is $66,436, and the average amount spent on taxes is 8.6% of that. Property taxes are high, though, with a median annual amount of $2,614.
6. Texas
Texas is one of the nine states with no income tax, but it makes up for it with high sales and property taxes. The sales tax rate is 6.25%, which applies to essentials like diapers and feminine hygiene products.
The property tax rate is also high, with a median annual amount of $3,390. The median annual household income in Texas is $72,418, and the average amount spent on taxes is 8.6% of that.
7. North Dakota
North Dakota has low income tax rates, ranging from 1.1% to 2.9%. It also has low sales tax rates of 5%, which do not apply to groceries or feminine hygiene products. The median annual household income in North Dakota is $71,970, and the average amount spent on taxes is 8.8% of that. Property taxes are moderate, with a median annual amount of $2,057.
8. Georgia
Georgia has progressive income tax rates, ranging from 1% to 5.75%. It also has low sales tax rates of 4%, which do not apply to groceries or feminine hygiene products. The median annual household income in Georgia is $68,688, and the average amount spent on taxes is 8.9% of that. Property taxes are low, with a median annual amount of $1,413.
9. South Carolina
South Carolina has progressive income tax rates, ranging from 0% to 7%. It also has low sales tax rates of 6%, which doesn’t apply to groceries or feminine hygiene products. The median annual household income in South Carolina is $64,587, and the average amount spent on taxes is 8.9% of that. Property taxes are very low, with a median annual amount of $895.
10. Oklahoma
Oklahoma has progressive income tax rates, ranging from 0% to 5%. It also has low sales tax rates of 4.5%, which do not apply to groceries or feminine hygiene products. The median annual household income in Oklahoma is $62,902, and the average amount spent on taxes is 9% of that. Property taxes are low, with a median annual amount of $1,278.
Saving in taxes is important, but taxes aren’t the only thing that matters when choosing a state to live in. If it were, there wouldn’t be 40 million people still living in California.
