which state has the lowest taxes
Alaska is widely ranked as the state with the lowest overall tax burden in recent analyses, with residents paying under about 5% of their income in combined state and local taxes on average. Several other states are close behind, but none consistently comes in lower than Alaska when all major taxes are considered together.
What “lowest taxes” really means
When people ask “which state has the lowest taxes,” there are three different angles:
- Overall tax burden : Total state + local taxes as a share of residents’ income.
- Specific tax types : Income tax, sales tax, or property tax individually.
- Practical cost of living : How those taxes interact with housing, wages, and prices.
Most neutral data sources use overall state-and-local tax burden as the fairest comparison, which is where Alaska wins.
Overall lowest-tax states
Recent summaries and tax-burden rankings repeatedly highlight these states as the lightest-tax places to live:
- Alaska – Lowest overall tax burden (under ~5% of income), no state income or statewide sales tax; relies heavily on oil and other resource revenues instead of taxing residents.
- Wyoming – Very low overall burden, no state income tax, relatively low property taxes, and heavy reliance on energy and mineral revenue.
- New Hampshire – Low overall burden; no general sales tax and no tax on wage income (though it does tax some interest/dividends).
- Tennessee – No tax on wage income, but higher sales taxes; still shows up as one of the lowest total burdens because income taxes are zero.
- Florida, South Dakota, North Dakota, Delaware, Oklahoma, Idaho – Often ranked in the next tier of low total tax burdens, each with different mixes of low income, sales, or property taxes.
Quick view: leading low-tax states
| State | Why taxes are low | Key trade- offs |
|---|---|---|
| Alaska | No state income or statewide sales tax; very low overall tax burden under ~5% of income. | [10][3][1]Remote, higher cost of goods, limited road access and colder climate. | [3][6]
| Wyoming | No state income tax and relatively low property tax; strong energy and mineral revenue. | [6][1][3]Smaller job market and services; rural lifestyle suits some but not all. | [3][6]
| New Hampshire | No general sales tax and no tax on wage income; low overall burden. | [10][1][6]Property taxes are relatively high to compensate. | [1][6]
| Tennessee | No tax on wages; ranked among the lowest overall tax-burden states. | [10][1][3]High sales tax means everyday purchases are more heavily taxed. | [1][10]
| Florida | No state income tax; popular retirement destination with relatively low total burden. | [6][3][1]Insurance and housing costs can be high, especially in coastal areas. | [3][6]
States with no income tax
If “lowest taxes” to you specifically means no state income tax , these states currently do not tax wage income:
- Alaska
- Florida
- Nevada
- South Dakota
- Texas
- Washington
- Wyoming
- Tennessee
- New Hampshire (wages untaxed; some tax on interest/dividends)
However, several of these lean more heavily on sales or property taxes, so the overall tax bite can be higher than in Alaska, Wyoming, or New Hampshire even without income tax.
Very low sales-tax states
If you mainly care about sales tax on purchases , the lowest combined state-and-local rates include:
- 0% state + local sales tax : Delaware, Montana, New Hampshire, Oregon.
- Very low combined sales tax : Alaska has no state-level sales tax, with local levies bringing the average to under 2%.
These states may still have income and property taxes, so they do not always win on total tax burden.
How to decide what “lowest taxes” means for you
Because tax systems are a trade-off, different people will prefer different “low-tax” states:
- High earners often prize no or low income tax (Alaska, Florida, Texas, Tennessee, Wyoming, etc.).
- Homeowners may focus more on property taxes , where states like Hawaii, Alabama, Nevada, Arizona, Colorado, South Carolina, Utah, Idaho, Louisiana, and Wyoming show some of the lowest typical effective rates.
- Shoppers and retirees on fixed incomes often feel sales tax most sharply, so the zero-sales-tax states can feel cheapest day to day.
In current data, though, the most consistent single answer to “which state has the lowest taxes overall?” is Alaska for its minimal combined state and local tax burden.
Information gathered from public forums or data available on the internet and portrayed here.