Throughout the United States, income and sales taxes vary dramatically from state to state. Some have no taxes at all and some states charge very high tax rates. Cost of living is a concern for most people and whether you are relocating for work, family, or to retire, taxes are often a key consideration in deciding where to live.
States without Income Tax
Income tax is a tax placed on the net income of a business or person. There are seven states that currently do not charge personal income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. In addition, there are two states that only charge taxes on interest and dividend income: New Hampshire and Tennessee.
Interest income is money earned off of investments such as a savings account, while dividend income is what a company pays out to stock holders and may consist of money or stock options.
States without Sales Tax
Sales tax is a tax that is charged on the sale of any product or service and is a percentage of the selling price. There are five states that do not charge sales tax: Delaware, New Hampshire, Montana, Oregon and Alaska. However, some localities in Alaska and Montana may charge a local sales tax.
Other items to evaluate
In addition to income and sales tax, it is also important to take into account property taxes, which are assessed by municipalities, as well as to analyze location and climate. A family moving to Alaska may have more flexible standards of living than a couple looking to retire in a more comfortable climate.