Lowest Tax State To Live In

So I have been fascinated by this for years ever since I learned there were several US States that do not levy an income tax.

First and foremost my conclusion: It is better to just live where you want to and accept
paying the tax so long as you can afford it. So I should probably end this post right here.  But since I have researched this so extensively I wanted to share some findings.

The next big realization is state income tax is not the whole picture.  For instance
Texas has very high property taxes that may outweigh the state tax savings.  Whereas Alabama, which does charge an income tax, does not charge property taxes on seniors.
So the whole state picture needs to be looked at.

My findings:

Lowest total tax-  Alaska– I have known that Alaska residents get a
check for around $2,000 a year for their states oil sales.  I also
discovered they have a 150,000 homestead exemption.  So as long as your
buy a house for under 150k (which is realistic in AK) you pay no
property tax in addition to no state tax.  Plus you get that $2,000
dividend per year. 

Hawaii – They have the lowest property tax rate by far.  Of course the
caveat is property values are the highest.  I believe sales tax is pretty
low too.  In retirement you can get a homestead exemption up to
$120,000.  That would help a little bit to lower the property tax even
more.  This certainly would not be the cheapest option, but maybe not as
expensive as most people think on first glance.  So if you ever desired
to live there I wouldn’t strike it off the list.

Florida – Not as good a deal as I initially thought.  Apparently hurricane and
flood insurance is insanely expensive there.  For a lot of people it is
more costly than their state tax savings.  However, for super high earners the income free haven would still outweigh the other costs

The big winner – Nevada – It isn’t as sweet a deal as AK, but certainly
more liveable or accessible for most people.  Property tax rates are still some of the lowest in the country, and home prices are also relatively on the lower side.  No
state tax is nice of course. 

If I were to live in Nevada I think my top choice would be Incline
Village bordering Lake Tahoe.  It’s absolutely gorgeous there, it could
easily be a national park.  Then maybe also get a place in Vegas to have
that warm cold dynamic.  Then you could float between the places anytime
throughout the year with no set time requirements to claim residency as
they are both the same state.  Between the two of them it would seem you
could always have pretty nice weather. Plus both would give good access
to California trips: Vegas would be driveable to SD, LA or even SB. Then
Incline Village is just a few hours outside of SF.


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