Here are the top 10 friendliest states
After years of stubborn inflation and rising costs, the question of where your money goes furtest has taken on a new urgency — and federal taxes can make a big difference.
A new analysis from Tax Found Competition The Tax Competition Index provides a detailed look at how each tax system affects residents and businesses based on more than 150 categories in five categories, income, sales and unemployment insurance.
“The index measures the structure of the tax, not all other things that businesses care about, such as educated work, quality of life, tolerance of other markets,” and some of these things include trade, “and some of these things include trade,” and some of these things include trade, “and some of the things of the tank, said the report.
“Tax, however, is an important part of the mix, and the federal tax structure helps position growth.” The best positions in the indexes get the systematic tax codes that get the win. “
Wins over a position, or war, is a baseball term that measures how many other players a player gives up compared to a player’s return level. In this analooliy, a well-organized tax code is like a Star player, giving the situation a margin above what a mediocre or well-organized one would get.
One clear pattern stands out among the top tax positions: Most of them have at least one large tax – such as personal income tax, corporate income tax or levy tax and unemployment insurance tax.
For example, South Dakota and Wyoming do not file federal or income taxes. Alaska and New Hampshire do not have an income tax or a higher sales tax. Florida, Tennessee and Texas do not have a single income tax. And Montana has no sales tax.
That said, the state does not need to eliminate large taxes to properly plan. States like Idaho and Indiana still levy all five major taxes — income, sales, self-employment, corporation and unemployment insurance — though in order.
Idaho, in particular, moved up the rankings this year by implementing a series of tax reforms, including reducing income tax rates. Those changes helped move the two spots up in the index, from 11th to 9th overall.
Here’s a look at the 10 states that ranked highest in the 2026 Tax Index:
1. Wyoming
- Individual tax position: 1st (tie)
- Safel tax rate: 6th
- Customs positions: 37th
2. South Dakota
- Individual tax position: 1st (tie)
- Sales tax position: 31st
- Customs positions: 8th
3. New Hampshire
- Individual tax position: 1st (tie)
- Sales Tax Rain: 1st
- Customs positions: 44th
4. Alaska
- Individual tax position: 1st (tie)
- Safel tax rate: 5th
- Customs positions: 31st
5. Florida
- Individual tax position: 1st (tie)
- Sales tax rank: 16th
- Customs positions: 20th
6. Montana
- Individual tax position: 12th
- Safel tax rate: 3rd
- Customs positions: 17th
7. Texas
- Individual tax position: 1st (tie)
- Sales tax rank: 36th
- Customs positions: 38th
8. Tennessee
- Individual tax position: 1st (tie)
- Safel tax rate: 47th
- Customs positions: 32nd
9. Idaho
- Individual tax position: 14th
- Safel tax rate: 8th
- Customs positions: 3rd
10. Indiana
- Individual tax position: 20th
- Sales tax rank: 14th
- Customs positions: 4th
The lowest nations
On the other hand, the lowest low states – Hawaii, Vermont, Massachusetts, Minnesota, Washington, Califorland, combining high tax rates, reduce the financial flexibility of taxpayers.
For example, take New Jersey, where residents and businesses face some of the nation’s highest taxes. It has one of the highest corporate tax rates (with rates ranging from 6.5% to 11.5%), one of the highest corporate income tax rates and some of the highest excise taxes in the country.
On top of that, the Garden State Income Tax has a tax exemption, imposes an inheritance tax and has a complex system for calculating individual taxes.
Here’s a summary of the lowest-ranked states in this year’s index:
41. Hawaii
- Individual tax position: 45th
- Safel tax rate: 29th
- Customs positions: 15th
42. Vermont
- Individual tax position: 39th
- Safel tax rate: 30th
- Customs positions: 50th
43. Massachusetts
- Individual tax position: 42nd
- Safel tax rate: 22nd
- Property tax rate: 48th
44. Minnesota
- Individual tax position: 44th
- TAX RANK: 35th
- Customs positions: 23rd
45. Washington
- Individual tax position: 31st
- Safel tax rate: 49th
- Customs positions: 25th
46. Maryland
- Individual tax position: 47th
- Safel tax rate: 40th
- Customs positions: 36th
47. Connecticut
- Individual tax position: 46th
- Safel tax rate: 19
- Customs positions: 49th
48. California
- Individual tax position: 49th
- Sales Tax Rate: 46th
- Customs positions: 27th
49. New Jersey
- Individual tax position: 48th
- Safel tax rate: 34th
- Customs positions: 42nd
50. New York
- Individual tax position: 50th
- Safel tax rate: 42nd
- Customs positions: 47th
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