Moving and Taxes: States With The Best Tax Rates

Proximity to work, school districts, and crime rates are all things we consider when choosing our next home. But, have you stopped to consider how taxes will impact your household in the long run?

According to the U.S. Census Bureau, the average American household pays more than $8,800 in federal income taxes each year.

When you add state and local tax to the mix, certain places can get expensive in a hurry.

The experts at WalletHub put together a list of the state with highest and lowest tax rates. Here’s what they found:

Residents in Alaska (pictured above) enjoy the best state and local tax rates.


Alaska’s top the list with an average state and local tax rate of just 5.84%. That’s about one-third of what Americans in Illinois are paying! You’ll notice that states in the Midwest dominate the top tier of this survey. Not a single state from the Northeast made the top 10. Florida is the first Southeastern state to make the list. Tennessee barely makes the cut at number 10.

1- Alaska (5.84%)
2- Delaware (6.25%)
3- Montana (7.11%)
4- Nevada (7.94%)
5- Wyoming (8.05%)
6- Florida (8.23%)
7- Utah (8.34%)
8- Idaho (8.43%)
9- Colorado (8.54%)
10- Tennessee (8.72%)

*average state and local tax rate as a percentage of household income

Chicago, Illinois may be the worst place for state and local tax rates nationwide.


The bottom portion of WalletHub’s list is filled with Northeastern states with notoriously high state income taxes. Texas is the lone Southern state to rank in the bottom tier. Ohio and Iowa are deadlocked at 13.18%. Illinois is by far the most expensive place for state and local taxes.

40- Texas (12.79%)
41- Rhode Island (12.82%)
42- New Jersey (12.84%)
43-Ohio (13.18%)
44- Iowa (13.18%)
45- Wisconsin (13.22%)
46- Nebraska (13.27%)
47- Kansas (13.43%)
48- Pennsylvania (13.97%)
49- New York (14.08%)
50- Connecticut (14.84%)
51- Illinois (15.01%)

*average state and local tax rate as a percentage of household income


Alabama and Georgia, like most states in the Southeast, have better state and local tax rates than most states in the Union.

15- Alabama (9.10%)
21- Georgia (10.57%)

If you’re in the market for a move, get a quick quote from Good Guys. We send full-time, highly-trained moving teams across the South to make transition efficient and smooth.