12 States With the Lowest Taxes in America: 2023

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By this year’s April 18 tax deadline, the average U.S. household can expect to pay some $11,000 in federal income taxes. On top of that, taxpayers will pay state and local taxes, but some will pay much more than others depending on where they live.

People who reside in the most expensive tax states will have to pay about 2.5 times more in taxes than those who live in the least expensive ones, according to a new report form WalletHub, a personal finance website.

The report dug through the various taxes in the 50 states and the District of Columbia to find where taxpayers get more of a break. The answer wasn’t always straightforward.

Researchers found that even in some states with no income tax, residents have to dig deep to pay other taxes. Take Washington, whose residents pay no income tax but spend 8.7% of their annual income on sales and excise taxes, the highest rate among all states. In Texas, another state with no income tax, residents can expect to pay real estate taxes at a median rate of 1.74% — or, put another way, about 6.1% of income per year.

WalletHub identified the states with the highest and lowest tax rates by comparing them across four types of taxation: real estate tax, vehicle property tax, income tax, and sales and excise tax. Researchers calculated the effective tax rate for a household at the mean third quintile U.S. income of $69,508.

See the gallery for the 12 states with the lowest effective total state and local tax rates, according to WalletHub.

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