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States with Lowest Taxes

States with Lowest Taxes
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Tax Scenarios across the US States

In an economy, where taxes determine the financial health of many households and competitive angles of the states, understanding the tax structure is paramount. In the United States, there's a display of tremendously diverse tax policies across the fifty states. Some have embraced a lower tax burden to attract individuals and businesses, improve economic opportunities, and accordingly, the quality of life of their residents. 

Key insights derived from the data at our disposal:

  • Alaska tops the list with the lowest state-local tax burden at 4.60%. The peculiarities of Alaska's revenue system lean heavily on revenues from oil and gas, sparing its residents from personal income or sales taxes.
  • States with substantial natural resources, such as Wyoming, contribute to lower tax obligations. Wyoming's abundant mineral resources like coal, oil, and natural gas prove foundational to its second-ranking 7.50% tax burden.
  • Tennessee exhibits a unique equilibrium with no state income tax, banking on sales tax and taxes on investment income to secure their third position with a 7.60% tax burden.
  • Intermediately ranked states like South Dakota, Michigan, Texas, and North Dakota, with tax burdens between 8.40% and 8.80%, display a trend of no or low personal income tax rates, thereby fostering business growth and personal financial prosperity. 
  • A cluster of states including Georgia, South Carolina, Oklahoma, Florida, and Louisiana hover around the 9% tax burden, signaling similar strategies of low income and sales taxes to invigorate economic growth and development.

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