Best Places to Pay Less

Looking for a great place to retire? Or, are you wondering if the state where you live is too expensive? Property values, cost of living, and lifestyle issues are all important considerations when looking for a place to live.

However, don’t forget to think about state taxes. Depending on your profile, some states are more tax-friendly in retirement than others. Explore more about retirement taxes below, find the best taxing states, and review income and sales tax rates for all 50 states.

What are the Different Types of Taxes that Countries Impose

Not only are income tax rates different from state to state, but different states have different types of taxes. State taxes and all or a set of the following types of taxes:

• State Income Tax: Income tax is often the biggest concern.
• Interest and dividends: Some states charge less income tax, but more on interest and capital gains.
• Sales Taxes: Sales taxes are usually made up of a combination of state sales tax and local sales tax.
• Property Taxes: Property taxes – in addition to property values ​​- can vary greatly depending on your location. You will need to consider the property tax rate and the cost of the property.
• Property taxes: Estate taxes also vary greatly from state to state, but most states do not tax your financial inheritance.
• Social Security and Pension Taxes: Very few states tax Social Security and pensions.

Should You Worry About State Taxes in Retirement?

Federal taxes can matter in retirement, but they’re rarely the be all and end all. Some say the tax revenue is high, while others have no tax at all. A few also tax Social Security, pensions, or withdrawals from retirement accounts separately.

This difference can affect your long-term spending power, especially if a large portion of your retirement income comes from taxable sources such as traditional IRA withdrawals or investment income. For retirees with large assets or a steady income, choosing a tax-friendly country can make a significant difference in the long run.

However, taxes are only one part of the retirement equation. The cost of housing, access to health care, insurance, weather risk, and the overall cost of living often have a significant impact on your financial security and quality of life. Many retirees find that moving for tax reasons alone does not yield the expected savings when these other factors are considered. The best way to evaluate taxes is as part of your overall financial plan—looking at how different areas affect your spending, income, and lifestyle together, not separately.

In addition, your ideal retirement tax situation will also depend on your financial situation and the services you expect to use.

So, Which States Have the Highest and Lowest Tax Burdens?

US News and World Report has calculated the tax burden in all 50 states. This measure shows total state and local tax revenue — from income taxes, sales taxes, and more — as a share of personal income, based on tax revenue data from the US Census Bureau’s Annual Survey of State and Local Government Finance and personal income data from the Bureau of Economic Analysis (BEA).

NOTE: Other analyzes find different conclusions about the lowest tax burden regions, indicating how difficult this analysis can be to calculate.

United States News The US Has the Lowest Total Tax Burden

• South Dakota
• In Florida
• New Hampshire
• Tennessee
• Wyoming

The Tax Foundation ranks the top 10 states (states with the lowest state taxes) as Wyoming, South Dakota, New Hampshire, Alaska, Florida, Montana, Texas, Tennessee, Idaho, and Indiana.

United States News The US Has the Highest Tax Burden

• New York
• Hawaii
• In New Mexico
• California
• Vermont

The Tax Foundation reports that the following states have the highest tax burden: Hawaii, Vermont, Massachusetts, Minnesota, Washington, Maryland, Connecticut, California, New Jersey, and New York.

Income Taxes by State

According to the Tax Foundation, by early 2026, seven states will have no income tax: Nevada, Wyoming, South Dakota, Texas, Florida, New Hampshire, and Tennessee. Also, the lowest rates can be found in Arizona (2.5%), North Dakota (2.5%), Ohio (2.75%), Indiana (2.95%), and Louisiana (3%).

California has the highest income tax rate at 13.3%.

Find your state’s tax rate on the map below:

Sales Taxes by State

The Tax Foundation also evaluates sales taxes by state. Forty-five states levy a state-level sales tax, and 38 states allow local sales taxes (including Alaska, which has no statewide sales tax).

The five states with the highest combined state and local sales tax are Louisiana (10.11%), Tennessee (9.61%), Washington (9.51%), Arkansas (9.46%), and Alabama (9.46%).

Find your state’s tax rate on the map below:

Property Tax by State

The latest data available from the Tax Foundation was published in 2025 with data for 2023.

State Real Estate Taxes

Although many people are concerned about estate taxes, only 12 states and the District of Columbia impose an estate tax, and five state an inheritance tax. Maryland is the only state that imposes both estate and inheritance taxes.

Those with estate taxes include: Washington, Hawaii, Vermont, Minnesota, New York, Connecticut, Oregon, Illinois, Maine, Maryland, Rhode Island, and Massachusetts.

Inheritance taxes are collected in Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania.

Federal Taxes for Social Security and Pensions

Social Security: Not all countries impose a Social Security tax, and for those that do, there are often exemptions or ways to reduce or eliminate the tax. You can find a complete list of state Social Security taxes here.

Pensions: According to Kiplinger, the following states do NOT tax pensions: Alabama, Alaska, Florida, Hawaii, Illinois, Michigan, Mississippi, Nevada, New Hampshire, Pennsylvania, South Dakota, Tennessee, Texas, Washington, and Wyoming.

How to Estimate and Plan Strategies for Your State Whole Life and State Retirement Taxes

Filing your taxes for a year can feel overwhelming and unpleasant. Just thinking about tax planning for the rest of your life can seem like an impossible task.

However, the Boldin Retirement Planner makes it easy to predict taxes and maximize your retirement income, no matter where you live.

For users of Basic Planner (free version), income taxes are modeled using a combined national and state rate.

For PlannerPlus subscribers, the income tax model is more accurate, detailed, and transparent. You can:

• See annual federal, state, and capital gains tax rates
• Review annual taxable income and capital gains received
• Itemize itemized deductions and property taxes.

Log in to see your expected lifetime taxes and strategize how to reduce this burden.