15 States With the Lowest Tax Rates: 2024

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Recent research from WalletHub, the personal finance website, showed that although the average U.S. household pays around $11,000 in federal income taxes, households across the country pay often drastically different amounts in state and local taxes.

WalletHub researchers compared the 50 states and the District of Columbia against national medians to find out where taxpayers have the highest tax burdens and the lowest ones. 

They looked at these types of taxation: 

Real estate tax: They first divided the median real estate tax amount paid by the median home price in each state, then applied the resulting rates to a house worth $281,900, the median value for a U.S. home, to determine the dollar amount paid as real estate tax per household.

Vehicle property tax: Researchers examined data for cities and counties that collectively account for at least 50% of the state’s population and extrapolated this to the state level using weighted averages based on population size. For each state, they assumed that all residents own the same vehicle: a Toyota Camry LE four-door sedan, 2023’s top-selling car, valued at $26,420, as of January.

Income tax: They used the percentage of income (middle income rate) spent on income tax from WalletHub’s recent research. “Income” refers to the mean third quintile U.S. income amount of $75,586.

Sales and excise tax: Researchers used the percentage of income (middle income rate) from the same research report to determine the amount spent on sales and excise taxes. Again, “income” refers to the mean third quintile U.S. income amount of $75,586.

See the accompanying gallery for the 15 states with the lowest taxes, according to WalletHub.

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