States with Lowest Overall Tax Burden: Complete Guide 2026
Data Notice: Figures, rates, and statistics cited in this article are based on the most recent available data at time of writing and may reflect projections or prior-year figures. Always verify current numbers with official sources before making financial, medical, or educational decisions.
States with Lowest Overall Tax Burden: Complete Guide 2026
Tax information is for educational purposes only and does not constitute tax advice. Consult a licensed tax professional for your specific situation.
Evaluating a state’s tax burden requires looking beyond any single tax. A state with no income tax may have high property or sales taxes, and vice versa. The overall tax burden, measured as total state and local taxes paid as a percentage of income, provides the most accurate picture. This guide ranks the states with the lowest combined tax burdens and explains the components that drive each state’s ranking.
Top 15 States with the Lowest Overall Tax Burden
| Rank | State | Overall Burden (% of Income) | Income Tax | Sales Tax (Combined) | Property Tax Rate |
|---|---|---|---|---|---|
| ~1 | Alaska | ~4.6% | None | ~1.76% | ~1.07% |
| ~2 | Wyoming | ~6.1% | None | ~5.44% | ~0.55% |
| ~3 | Tennessee | ~6.3% | None | ~9.55% | ~0.56% |
| ~4 | South Dakota | ~6.5% | None | ~6.1% | ~1.08% |
| ~5 | Florida | ~6.6% | None | ~7.01% | ~0.80% |
| ~6 | New Hampshire | ~6.7% | ~3% (div/int) | None | ~1.86% |
| ~7 | Nevada | ~6.8% | None | ~8.23% | ~0.53% |
| ~8 | Texas | ~7.0% | None | ~8.20% | ~1.60% |
| ~9 | Montana | ~7.1% | ~5.9% | None | ~0.74% |
| ~10 | Arizona | ~7.2% | ~2.5% | ~8.37% | ~0.51% |
| ~11 | Delaware | ~7.3% | ~6.6% | None | ~0.59% |
| ~12 | Colorado | ~7.5% | ~4.4% | ~7.77% | ~0.49% |
| ~13 | North Dakota | ~7.5% | ~1.95% | ~6.96% | ~0.94% |
| ~14 | Idaho | ~7.6% | ~5.695% | ~6.02% | ~0.58% |
| ~15 | Oklahoma | ~7.6% | ~4.75% | ~8.98% | ~0.88% |
For comparison, the highest-burden states include New York (~12.7%), Hawaii (~12.2%), and Maine (~11.7%).
What Goes Into Overall Tax Burden
Three Primary Components
| Component | National Average | Lowest State | Highest State |
|---|---|---|---|
| Income tax (% of income) | ~3.0% | ~0% (9 states) | ~4.7% (NY) |
| Sales tax (% of income) | ~2.3% | ~0% (5 states) | ~3.7% (HI) |
| Property tax (% of income) | ~3.1% | ~1.3% (AL) | ~4.9% (NJ) |
| Other taxes/fees | ~0.8% | Varies | Varies |
The total burden depends on the interplay of all components. Alaska achieves the lowest burden through a unique combination of no income tax, no state sales tax (with minimal local sales taxes), and significant revenue from oil production.
How Different Profiles Are Affected
Retiree (Income ~$60,000, Home Value ~$300,000)
| State | Income Tax | Property Tax | Sales Tax | Total Estimated |
|---|---|---|---|---|
| Wyoming | ~$0 | ~$1,650 | ~$1,200 | ~$2,850 |
| Florida | ~$0 | ~$2,400 | ~$1,600 | ~$4,000 |
| Tennessee | ~$0 | ~$1,680 | ~$2,100 | ~$3,780 |
| Arizona | ~$1,000 | ~$1,530 | ~$1,500 | ~$4,030 |
| New York | ~$3,000 | ~$4,860 | ~$1,700 | ~$9,560 |
Young Professional (Income ~$100,000, Renter)
| State | Income Tax | Property Tax | Sales Tax | Total Estimated |
|---|---|---|---|---|
| Wyoming | ~$0 | N/A (renter) | ~$2,000 | ~$2,000 |
| Florida | ~$0 | N/A | ~$2,500 | ~$2,500 |
| Texas | ~$0 | N/A | ~$2,800 | ~$2,800 |
| Arizona | ~$2,100 | N/A | ~$2,400 | ~$4,500 |
| California | ~$5,600 | N/A | ~$2,600 | ~$8,200 |
Family (Income ~$150,000, Home Value ~$500,000)
| State | Income Tax | Property Tax | Sales Tax | Total Estimated |
|---|---|---|---|---|
| Wyoming | ~$0 | ~$2,750 | ~$3,500 | ~$6,250 |
| Florida | ~$0 | ~$4,000 | ~$4,200 | ~$8,200 |
| Tennessee | ~$0 | ~$2,800 | ~$5,700 | ~$8,500 |
| Texas | ~$0 | ~$8,000 | ~$5,000 | ~$13,000 |
| New Jersey | ~$7,200 | ~$11,150 | ~$3,900 | ~$22,250 |
These examples illustrate how Texas, despite having no income tax, can be expensive for homeowners due to high property taxes. Wyoming provides the lowest total burden across all profiles.
For the full state-by-state comparison, see our state income tax rates comparison.
Why Some Low-Burden States Stay Low
Natural Resource Revenue
Alaska and Wyoming fund government through oil and mineral extraction taxes, reducing the need for individual taxes. This model works because of abundant natural resources but creates budget volatility tied to commodity prices.
Tourism Revenue
Nevada and Tennessee benefit from significant tourism-related taxes (gaming taxes in Nevada, hotel and entertainment taxes in Tennessee) that shift part of the burden to visitors rather than residents.
Lean Government
Some low-burden states simply spend less on state services. This can mean fewer social programs, less infrastructure investment, or lower public employee compensation. Whether this is a benefit or drawback depends on your priorities.
Tips for Evaluating Overall Tax Burden
-
Calculate your personal burden. National averages and rankings may not match your situation. Calculate your actual income tax, property tax, and estimated sales tax to determine your personal burden in each state. Use our tax bracket calculator.
-
Consider your income trajectory. If your income is likely to grow significantly, states with no income tax provide increasing savings over time. A ~$50,000 raise in a no-income-tax state is ~$50,000 more than in a state taxing at ~10%.
-
Factor in retirement plans. Your tax burden will change in retirement as income sources shift from wages to pensions, Social Security, and investment income. Plan for your future state tax burden, not just your current one. See our federal income tax guide.
-
Account for all taxes. Do not overlook vehicle registration fees, toll roads, estate and inheritance taxes, gas taxes, and excise taxes. These can add ~$500 to ~$2,000 or more to your annual tax burden.
-
Weigh taxes against services. Higher-tax states often provide better public schools, infrastructure, healthcare access, and social safety nets. Determine what trade-offs matter most to your quality of life.
-
Plan your move carefully. If relocating to lower your tax burden, establish clear residency to prevent your former state from pursuing you for taxes. See our self-employment tax guide for additional considerations if you run a business.
Key Takeaways
- Alaska (~4.6%), Wyoming (~6.1%), and Tennessee (~6.3%) have the lowest overall state and local tax burdens as a percentage of income.
- No-income-tax states dominate the top rankings, but property taxes (Texas) and sales taxes (Tennessee) can partially offset the income tax savings.
- Wyoming provides the lowest total tax burden across most income levels and housing profiles due to its combination of no income tax, low sales tax, and low property tax.
- Your personal tax burden depends on income, homeownership status, spending habits, and the specific mix of taxes in your state.
- Natural resource revenue and tourism taxes allow some states to maintain low individual tax burdens.
- The highest-burden states (New York, Hawaii, Maine) impose combined burdens roughly ~3 times higher than the lowest-burden states.
Next Steps
- State Income Tax Rates Comparison 2026 — Detailed income tax comparison for all 50 states.
- Federal Income Tax Guide 2026 — Optimize your federal taxes alongside state planning.
- Tax Bracket Calculator — Model your personal tax burden by state.
- Find a CPA Near You — Get expert help evaluating your overall tax position.