Top 21 U.S. States With the Lowest Tax Burdens, Ranked

There are many factors to weigh when choosing where to live, and taxes are among the most important. Whether you’re planning a move or just curious how your state compares, this article lists the 21 states with the lowest overall tax burdens. It explains how different tax mixes—income, property, sales and excise—affect residents’ wallets and highlights specific exemptions and policies that lower tax pressure for certain groups.

States that appear to have low tax burdens often offset lost revenue from one tax by raising another. For example, a state that forgoes personal income tax may rely more heavily on sales, excise or property taxes. Conversely, mineral- or resource-rich states can shift revenue collection toward corporations or natural-resource royalties, sometimes even distributing payments to residents. The examples below use the tax-burden data reported by WalletHub’s 2021 analysis and describe the main reasons each state ranks low.

19. Arizona (Tie)

Individual income tax: 1.43%
Property tax: 2.53%
Sales and excise tax: 4.23%
Total tax burden: 8.19%

Why Arizona ranks low

The three states tied at 8.19% share a common pattern: relatively low income and property taxes offset somewhat higher sales taxes. Arizona’s income tax is among the lower rates nationwide, and its property taxes are below the national median, which helps keep the overall burden modest despite a fairly high sales and excise tax.

19. New Mexico (Tie)

Individual income tax: 1.44%
Property tax: 2%
Sales and excise tax: 4.75%
Total tax burden: 8.19%

Why New Mexico ranks low

New Mexico’s low property taxes and absence of estate or inheritance taxes reduce the burden for many residents. The state uses a progressive income-tax structure (ranging from low initial rates up to higher brackets), and it exempts groceries and prescription drugs from sales tax. Seniors and low-income residents can qualify for exemptions or reductions, which further lowers personal tax liabilities.

19. Texas (Tie)

Individual income tax: 0%
Property tax: 3.91%
Sales and excise tax: 4.28%
Total tax burden: 8.19%

Why Texas ranks low

Texas has no state personal income tax and no estate or inheritance taxes, which significantly lowers tax liability for many residents. To make up revenue, the state relies more on property and sales taxes. Local property-tax exemptions—especially for primary residences, senior citizens, disabled residents and disabled veterans—help limit the overall tax burden for many homeowners. Fuel and alcohol excise taxes are relatively low compared with other states.

18. Indiana

Individual income tax: 2.05%
Property tax: 2.19%
Sales and excise tax: 3.91%
Total tax burden: 8.15%

Why Indiana ranks low

Indiana’s flat personal income tax is relatively low, and the state does not levy estate or inheritance taxes. Standard personal exemptions are modest, but the combination of moderate property taxes and exemptions—along with sales tax exemptions for groceries and prescription drugs—helps keep the overall burden below the national average.

17. North Carolina

Individual income tax: 2.63%
Property tax: 2.15%
Sales and excise tax: 3.29%
Total tax burden: 8.07%

Why North Carolina ranks low

North Carolina uses a flat income tax with standard deductions aligned to federal rules, reducing taxable income for many residents. Property taxes are notably lower than the national average. The state’s excise taxes vary—motor fuel taxes are higher, while cigarette taxes are relatively low—but overall the mix results in a moderate tax burden that has been reduced by recent tax reforms.

16. Georgia

Individual income tax: 2.38%
Property tax: 2.59%
Sales and excise tax: 2.94%
Total tax burden: 7.91%

Why Georgia ranks low

Georgia exempts Social Security benefits and offers substantial exemptions for retirement income, which benefits retirees. The state has a progressive income-tax structure but many taxpayers pay higher brackets. Property taxes are below average and state law provides exemptions and credits for primary residences and low-income seniors, easing the overall burden.

15. Idaho

Individual income tax: 2.38%
Property tax: 2.32%
Sales and excise tax: 3.18%
Total tax burden: 7.88%

Why Idaho ranks low

Idaho does not tax Social Security benefits and provides deductions for public pensions for older or disabled residents. Property tax rates are below the national average and property-tax relief is available for low-income seniors. However, retirement account withdrawals and other non-Social Security retirement income can be taxable, and grocery sales are subject to sales tax in Idaho.

14. Virginia

Individual income tax: 2.87%
Property tax: 2.93%
Sales and excise tax: 2.06%
Total tax burden: 7.86%

Why Virginia ranks low

Virginia’s sales and excise taxes are relatively low compared with many states, and the state does not impose estate or inheritance taxes. Although its progressive income-tax top rate is higher than some states, overall lower sales tax levels and modest property taxes keep the combined burden relatively low.

13. North Dakota

Individual income tax: 0.87%
Property tax: 2.97%
Sales and excise tax: 3.97%
Total tax burden: 7.81%

Why North Dakota ranks low

North Dakota maintains low progressive income-tax rates—capped at a modest top rate—and does not impose an estate tax. Food and prescription drugs are exempt from sales tax, and excise taxes on items like fuel, alcohol and tobacco are among the nation’s lowest, which helps keep the overall tax burden down.

12. Missouri

Individual income tax: 2.37%
Property tax: 2.25%
Sales and excise tax: 3.13%
Total tax burden: 7.75%

Why Missouri ranks low

Missouri’s tiered income tax offers relief to low earners and allows a higher standard deduction for state filings. Extra deductions for seniors, blind or disabled taxpayers and the absence of estate taxes reduce liabilities further. Missouri also has some of the lowest excise taxes on cigarettes and gasoline, and property taxes rank among the lowest nationally.

9. Alabama (Tie)

Individual income tax: 1.96%
Property tax: 1.41%
Sales and excise tax: 4.08%
Total tax burden: 7.45%

Why Alabama ranks low

Alabama’s low property taxes are the lowest in the country, and it does not tax Social Security or many government pension benefits. Low-income and disabled homeowners can qualify for significant homestead exemptions. While sales taxes can be relatively high locally, the combination of very low property tax and favorable treatment of retirement income keeps Alabama’s overall burden low.

9. Montana (Tie)

Individual income tax: 2.58%
Property tax: 3.59%
Sales and excise tax: 1.28%
Total tax burden: 7.45%

Why Montana ranks low

Montana has no statewide sales tax, instead generating revenue from income taxes, business gross receipts, licensing fees and excises on items like gasoline and lodging. Food and prescriptions are exempt from taxation, and the state provides property tax relief for older residents and renters. Montana’s lack of sales tax offsets somewhat higher property taxes for many households.

9. South Carolina (Tie)

Individual income tax: 1.99%
Property tax: 2.77%
Sales and excise tax: 2.69%
Total tax burden: 7.45%

Why South Carolina ranks low

South Carolina exempts Social Security and offers substantial retirement-income exclusions for seniors and veterans. It has no estate or inheritance taxes and provides additional tax benefits for elderly and disabled residents, making it particularly favorable for retirees despite moderate state income rates.

8. South Dakota

Individual income tax: 0%
Property tax: 3.02%
Sales and excise tax: 4.35%
Total tax burden: 7.37%

Why South Dakota ranks low

South Dakota does not impose personal income tax (including interest and dividends) and has no estate or inheritance taxes. To fund government services, the state relies more on sales and property taxes, but many services are exempt from sales tax and numerous exemptions exist for essentials like prescription drugs and certain agricultural or educational services.

7. Oklahoma

Individual income tax: 1.92%
Property tax: 1.67%
Sales and excise tax: 3.54%
Total tax burden: 7.13%

Why Oklahoma ranks low

Oklahoma’s tiered income tax has a modest top rate and its property taxes are low, which keeps the total burden down for many households. The state raises revenue through sales taxes (including on groceries) and excise taxes on fuel, alcohol and tobacco, but overall individual tax payments are relatively low compared with most states.

6. Florida

Individual income tax: 0%
Property tax: 2.74%
Sales and excise tax: 4.23%
Total tax burden: 6.97%

Why Florida ranks low

Florida does not levy a state personal income, estate, inheritance or investment tax, making it attractive for many retirees and high earners. The state relies heavily on sales and excise taxes, while local governments collect property taxes that are among the nation’s highest; however, broad homestead and senior exemptions limit the burden for many homeowners. Groceries and medicines are generally exempt from sales tax.

5. New Hampshire

Individual income tax: 0.13%
Property tax: 5.47%
Sales and excise tax: 1.24%
Total tax burden: 6.84%

Why New Hampshire ranks low

New Hampshire has almost no general sales tax and levies no income tax on wages; it charges a small tax only on interest and dividends above a modest threshold. The state funds public services primarily through high property taxes and targeted excise taxes (on items like fuel, lodging and restaurant meals), so homeowners often see higher property tax bills even though overall tax burden remains low for many residents.

4. Delaware

Individual income tax: 3.25%
Property tax: 1.77%
Sales and excise tax: 1.19%
Total tax burden: 6.21%

Why Delaware ranks low

Delaware keeps consumer taxes low and generates substantial revenue from business-related taxes such as gross-receipts taxes and franchise fees. Personal income tax is progressive but moderate, the state offers retirement-income protections and property taxes are among the lowest in the nation—factors that combine to produce a low overall tax burden for many residents.

3. Wyoming

Individual income tax: 0%
Property tax: 3.33%
Sales and excise tax: 2.81%
Total tax burden: 6.14%

Why Wyoming ranks low

Wyoming imposes no personal or corporate income tax and generally exempts retirement income earned elsewhere from state tax. It also lacks estate and inheritance taxes. The state raises revenue from mineral royalties and severance taxes tied to natural resources, allowing residents to enjoy low direct tax rates and a range of estate-planning advantages.

2. Tennessee

Individual income tax: 0.08%
Property tax: 1.70%
Sales and excise tax: 3.96%
Total tax burden: 5.74%

Why Tennessee ranks low

Tennessee imposes virtually no personal income tax on wages and only a small tax on interest and dividends, making it attractive to retirees and investors. It does not levy estate or inheritance taxes and offers property-tax relief for low-income seniors and disabled homeowners. The state does rely heavily on sales tax—including taxation of groceries in some cases—and excise taxes on items like gasoline and tobacco.

1. Alaska

Individual income tax: 0%
Property tax: 3.68%
Sales and excise tax: 1.42%
Total tax burden: 5.10%

Why Alaska ranks lowest

Alaska has the lowest individual tax burden in the country. The state does not charge a general sales tax or a state personal income tax, and only a small number of municipalities collect local sales or property taxes. Alaska funds government services largely through oil and resource revenues and levies relatively low excises on gasoline and other goods. In addition, Alaska’s Permanent Fund Dividend distributes a per-resident payment drawn from oil royalties, which helps offset household costs.

Summary: Low-tax states achieve their rankings through different combinations of exemptions, low rates, or alternative revenue sources. Some rely on natural-resource revenues or business taxes, while others shift the burden toward sales or property taxes. Reviewing the tax mix—and how it affects your personal situation, such as retirement income or homeownership—is essential when comparing state tax burdens.