I typically hear about the benefits of dwelling in one of many few states in the USA that don’t acquire state revenue taxes. Nevertheless, I simply as typically questioned how different tax implications in every state examine. How a lot does every state cost in gross sales tax and property tax?
For instance… three states (of 8 whole) that don’t acquire state revenue taxes in any respect are Florida, Texas, and Tennessee. Do they cost considerably extra in state gross sales tax to make up for the distinction? What about property taxes? Is there a big discrepancy there?
Is it actually extra advantageous for a median particular person to reside in a state that doesn’t acquire taxes on their revenue?
The Variables Forestall a Problem
As I did my analysis for this text and began digging into the numbers, it turned abundantly clear that there are too many variables in play to find out comparable numbers that may apply to anyone (or everyone).
Revenue tax charges in some states are mounted charges the place everyone pays the very same proportion. Different states cost progressive variable revenue tax charges, the place the share you pay relies in your revenue. This variable alone made this comparability practically not possible to finish.
State gross sales taxes additionally sophisticated issues, as some states even have native jurisdictions (cities or counties) that cost separate gross sales taxes along with the state gross sales taxes. Once more, this variable made this comparability very troublesome.
Property taxes prevented the ultimate problem, as these charges are sometimes set by native jurisdictions and never by the state. However, I felt that property taxes wanted to be included on this comparability as a result of everyone has to reside someplace. Even renters not directly pay property tax, so it applies to virtually everyone.
Observe: I purposely ignored fuel tax for this comparability, because the world strikes in the direction of extra electrical autos and the quantity that a median particular person spends on fuel can range so significantly.
How I Got here Up With The Common Family for the USA
I created a spreadsheet in Google Sheets with 5 totally different tabs (sheets) as follows…
I used the median family revenue for every state. The gross sales tax information listed out the common gross sales tax price for every state, so I used that and calculated primarily based on a made-up assumption that every family spends 15% of its revenue on items which might be topic to gross sales tax. The revenue taxes for every revenue degree are actual, primarily based on the default variables within the IRS calculator that I used. The property taxes are precise averages primarily based on common dwelling costs in every state.
The Highest Total Taxed States for Common U.S. Households
Congratulations to New Jersey, Connecticut, and Illinois for rounding out the highest 3 for being the very best taxed states for common households! The Large Apple (New York) adopted up within the 4th spot general. To my shock, California didn’t even make the highest 10!
| State | Median Revenue | State Revenue Tax | Gross sales Tax | Avg Property Tax | Whole Taxes |
| New Jersey | $85,245 | $3,241.91 | $844 | $5,419 | $9,504.84 |
| Connecticut | $79,855 | $3,942.03 | $761 | $4,658 | $9,360.65 |
| Illinois | $68,428 | $3,272.10 | $904 | $4,942 | $9,118.38 |
| New York | $71,117 | $3,532.50 | $909 | $3,749 | $8,190.38 |
| Massachusetts | $84,385 | $3,999.25 | $791 | $2,667 | $7,457.36 |
| Minnesota | $73,382 | $4,068.26 | $824 | $2,429 | $7,321.71 |
| Wisconsin | $63,293 | $2,760.81 | $516 | $4,027 | $7,303.33 |
| Iowa | $61,836 | $3,109.48 | $644 | $3,407 | $7,160.19 |
| District of Columbia | $90,842 | $5,054.82 | $818 | $1,221 | $7,093.40 |
| Hawaii | $83,173 | $5,839.49 | $554 | $606 | $6,999.42 |
The Lowest Total Taxed States for Common U.S. Households
Congratulations to Wyoming, Nevada, and Tennessee for being the highest 3 states to reside in for the common family by way of paying the least in general taxes. Florida and Alaska weren’t far behind in 4th and fifth place.
| State | Median Revenue | State Revenue Tax | Gross sales Tax | Avg Property Tax | Whole Taxes |
| Wyoming | $65,304 | $0.00 | $511 | $1,319 | $1,830.33 |
| Nevada | $62,043 | $0.00 | $766 | $1,310 | $2,075.92 |
| Tennessee | $54,833 | $0.00 | $785 | $1,548 | $2,333.48 |
| Florida | $57,703 | $0.00 | $607 | $1,934 | $2,540.75 |
| Alaska | $77,790 | $0.00 | $205 | $2,599 | $2,804.37 |
| Arkansas | $49,475 | $1,084.53 | $703 | $1,358 | $3,145.32 |
| Washington | $77,006 | $0.00 | $1,073 | $2,134 | $3,207.08 |
| Louisiana | $50,800 | $1,414.25 | $728 | $1,187 | $3,328.96 |
| South Dakota | $59,896 | $0.00 | $575 | $2,857 | $3,432.00 |
| North Dakota | $65,315 | $657.20 | $682 | $2,138 | $3,477.09 |
State Revenue Taxes Do Matter!
I’ll admit – I used to be barely shocked after I noticed the ultimate numbers after finishing the calculations. I believed the low (or no) revenue tax states would certainly compensate for the discrepancy by charging a lot larger gross sales taxes and property taxes. Because it seems, 7 of the 8 states that acquire zero revenue taxes made the highest 10, with 5 of these being the highest 5 spots! Texas is the one no revenue tax state that didn’t make the highest 10 on this listing.
Wish to see ALL of the info? Click on right here to entry a View Solely model of my Google Sheet.
Pay Much less in Taxes by Residing in a Sure State
The underside line is that this… in the event you don’t already reside in one of many states that fees the least in taxes and also you’re open to contemplating a transfer… chances are you’ll wish to contemplate one of many states that fees the least in general taxes.
In spite of everything – it’s all the time clever to maintain as a lot of your cash as doable out of the fingers of the federal government, who’s well-known for his or her potential to mishandle cash.
Keep in mind – these numbers have been calculated utilizing obscure averages and made-up assumptions. Remember to calculate your personal numbers primarily based in your particular variables earlier than making an enormous life choice, like shifting to a different state simply because some random blogger revealed some numbers. Lol
