--- title: These Are the 10 Most Tax-Friendly States in the U.S. description: "The Tax Foundation ranks each state's tax policies. Here's which states are at the top —\_and why." authors: - name: Liliana Hall role: Reporter url: https://money.com/author/liliana-hall/ bio: Liliana Hall joined Money in 2025. She is an Austin-based reporter for Money, where she covers a range of topics, including financial news, policy, banking, investing, passive income, financial planning and student loan debt. education: University of Texas at Austin at_money_since: 2025 articles: 132 covers: - Taxes - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Retirement - Shopping social: - https://x.com/lilihallllllll - https://www.linkedin.com/in/liliana-hall/ editors: - name: Katherine Peach role: Associate Editor url: https://money.com/author/katherine-peach/ bio: Katherine Peach is an associate editor with a focus on news and email at Money. She didn’t always intend to write about money. She’s a classically trained pianist who dreamed of becoming an archaeologist. However, in 2007 Katherine began working in financial publishing as an editor for Agora Inc. (Apparently, unearthing ideas about improving your personal finances isn’t such a bad career alternative!) Katherine’s writing and editing work has been featured in Investing Daily, Clever, Investor Junkie, The Palm Beach Letter, Truth & Plenty, Independence Monthly, NICHE, AmericanStyle, AntiqueWeek, Millennial Money, Money Done Right, TheStreet, Sure Dividend and many others. Katherine holds a Bachelor of Arts in Ancient Studies with concentrations in Archaeology and Ancient Languages and a minor in Literature from the University of Maryland, Baltimore County. She is a member of Phi Beta Kappa. education: University of Maryland, Baltimore County at_money_since: 2025 articles: 14 covers: - Taxes - Banking - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Federal Reserve Rate Cuts - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping published: '2025-11-11T20:35:46.000Z' modified: '2026-02-25T19:30:30.000Z' section: Taxes tags: - News word_count: 883 canonical: https://money.com/10-best-states-for-taxpayers/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Photo-illustration of a United States map in the background with hands, a house, money, and a car in the foreground.](https://img.money.com/2024/11/News-Friendliest-State-Taxpayers.jpg) After years of stubborn [inflation](https://money.com/grocery-prices-may-never-fall/) and rising [housing costs](https://money.com/fed-rate-cut-wont-lower-mortgage-rates/), the question of where your money goes the furthest has taken on new urgency — and state taxes can make a big difference. A new analysis from the [Tax Foundation’s 2026 State Tax Competitiveness Index](https://taxfoundation.org/statetaxindex/) offers a detailed look at how each state’s tax system affects residents and businesses — ranking them based on more than 150 variables within five tax categories, including corporate, individual income, sales and excise, property and wealth and unemployment insurance. “The index measures tax structure, not all the other things businesses care about, like an educated workforce, quality of life, proximity to relevant markets or even the weather — and some of these things involve trade-offs,” the Tax Foundation, a Washington, D.C.-based think tank, said in the report. ### Rated A+ by the BBB ![Get Started](https://s3.consumersadvocate.org/prd/image/image/14979/medium_d9420f2c-6d0b-4726-b903-60fb37740830.png) Our Partner [Get Started](https://money.com/go/3eaaa99f1355?bidid=4030070296&pmeta=p129-c739-u28541&ptid=662345583&ptoken=693f5320bfdb5290cc0d467549277c6a) ### Over 15 years of Experience ![Get Started](https://s3.consumersadvocate.org/prd/image/image/36123/medium_d8e31451-10fb-4690-a053-85981545c371.webp) Our Partner [Get Started](https://money.com/go/eae1d8049379?bidid=4030070304&pmeta=p129-c739-u28541&ptid=662345583&ptoken=d00f2c2cb5b132cd285efe4b8173caa2) ### 12+ years of tax resolution experience ![Get Started](https://s3.consumersadvocate.org/prd/image/image/19221/medium_21c467f5-9614-45a6-a827-5c1698cf1de6.png) Our Partner [Get Started](https://money.com/go/cff8601a1240?bidid=4030070293&pmeta=p129-c739-u28541&ptid=662345583&ptoken=7e07427ca8b180fdf18d2458f30c39df) ### 21+ years in service ![Get Started](https://s3.consumersadvocate.org/prd/image/image/37015/medium_cb5bc133-3b62-412b-9420-e17d1c5aaa63.webp) Our Partner [Get Started](https://money.com/go/77ee16d5c581?bidid=4030070302&pmeta=p129-c739-u28541&ptid=662345583&ptoken=28ac0928ed72a13cc2c35f7aad953bc3) ### 24/7 Client Portal Access ![Get Started](https://s3.consumersadvocate.org/prd/image/image/38669/medium_134094f5-0d61-4290-98dd-6ea7bc5551c2.webp) Our Partner [Get Started](https://money.com/go/a600772c2644?bidid=4030070299&pmeta=p129-c739-u28541&ptid=662345583&ptoken=806cf7a44e3ebdd9ca8ab21b52d42a71) “Taxes, however, are an important part of the mix, and modernizing a state’s tax structure helps position it for growth. States that rank better on the Index have better-structured tax codes, and states with better-structured tax codes get Wins Above Replacement.” Wins Above Replacement, or WAR, is a baseball term that measures how many more wins a player contributes compared with a replacement-level player. In this analogy, a well-structured tax code is like the star player, giving a state an edge over what it would get with a mediocre or poorly structured one. One clear pattern stands out among the top-ranked tax-friendly states: Many forgo at least one major tax — such as individual [income tax](https://money.com/no-income-tax-states-expensive/), corporate income tax or state-level [sales tax](https://money.com/state-sales-tax-rates-map/) — even though all still levy [property](https://money.com/lowest-property-taxes-by-county-2024/) and unemployment insurance taxes. For instance, South Dakota and Wyoming don't levy either a corporate or an individual income tax. Alaska and New Hampshire have neither an individual income tax nor a state-level sales tax. Florida, Tennessee and Texas have no individual income tax. And Montana has no sales tax. That said, a state doesn’t need to eliminate major taxes to rank well. States like Idaho and Indiana still levy all five main taxes — income, sales, corporate, property and unemployment insurance — yet they rank 9th and 10th, respectively. Idaho, in particular, climbed the rankings this year by implementing a series of tax reforms, including reducing its flat individual and corporate income tax rates. Those changes helped boost the state two spots on the index, from 11th to 9th overall. Here’s a look at the 10 states that ranked highest on the 2026 State Tax Competitiveness Index: ## 1\. Wyoming - Individual income tax rank: 1st (tie) - Sales tax rank: 6th - Property tax rank: 37th ## 2\. South Dakota - Individual income tax rank: 1st (tie) - Sales tax rank: 31st - Property tax rank: 8th ## 3\. New Hampshire - Individual income tax rank: 1st (tie) - Sales tax rank: 1st - Property tax rank: 44th ## 4\. Alaska - Individual income tax rank: 1st (tie) - Sales tax rank: 5th - Property tax rank: 31st ## 5\. Florida - Individual income tax rank: 1st (tie) - Sales tax rank: 16th - Property tax rank: 20th ## 6\. Montana - Individual income tax rank: 12th - Sales tax rank: 3rd - Property tax rank: 17th ## 7\. Texas - Individual income tax rank: 1st (tie) - Sales tax rank: 36th - Property tax rank: 38th ## 8\. Tennessee - Individual income tax rank: 1st (tie) - Sales tax rank: 47th - Property tax rank: 32nd ## 9\. Idaho - Individual income tax rank: 14th - Sales tax rank: 8th - Property tax rank: 3rd ## 10\. Indiana - Individual income tax rank: 20th - Sales tax rank: 14th - Property tax rank: 4th ### Rated A+ by the BBB ![Get Started](https://s3.consumersadvocate.org/prd/image/image/14979/medium_d9420f2c-6d0b-4726-b903-60fb37740830.png) Our Partner [Get Started](https://money.com/go/3eaaa99f1355?bidid=4030070296&pmeta=p129-c739-u28541&ptid=662345583&ptoken=693f5320bfdb5290cc0d467549277c6a) ### Over 15 years of Experience ![Get Started](https://s3.consumersadvocate.org/prd/image/image/36123/medium_d8e31451-10fb-4690-a053-85981545c371.webp) Our Partner [Get Started](https://money.com/go/eae1d8049379?bidid=4030070304&pmeta=p129-c739-u28541&ptid=662345583&ptoken=d00f2c2cb5b132cd285efe4b8173caa2) ### 12+ years of tax resolution experience ![Get Started](https://s3.consumersadvocate.org/prd/image/image/19221/medium_21c467f5-9614-45a6-a827-5c1698cf1de6.png) Our Partner [Get Started](https://money.com/go/cff8601a1240?bidid=4030070293&pmeta=p129-c739-u28541&ptid=662345583&ptoken=7e07427ca8b180fdf18d2458f30c39df) ### 21+ years in service ![Get Started](https://s3.consumersadvocate.org/prd/image/image/37015/medium_cb5bc133-3b62-412b-9420-e17d1c5aaa63.webp) Our Partner [Get Started](https://money.com/go/77ee16d5c581?bidid=4030070302&pmeta=p129-c739-u28541&ptid=662345583&ptoken=28ac0928ed72a13cc2c35f7aad953bc3) ### 24/7 Client Portal Access ![Get Started](https://s3.consumersadvocate.org/prd/image/image/38669/medium_134094f5-0d61-4290-98dd-6ea7bc5551c2.webp) Our Partner [Get Started](https://money.com/go/a600772c2644?bidid=4030070299&pmeta=p129-c739-u28541&ptid=662345583&ptoken=806cf7a44e3ebdd9ca8ab21b52d42a71) ## Lowest-ranked states At the other end, the 10 lowest-ranked states — Hawaii, Vermont, Massachusetts, Minnesota, Washington, Maryland, Connecticut, California, New Jersey and New York — tend to combine high tax rates with complex tax structures, reducing financial flexibility for taxpayers. Take New Jersey, for example, where residents and businesses face some of the nation's steepest taxes. It has one of the highest corporate income tax rates (with [rates ranging](https://taxfoundation.org/location/new-jersey/#:~:text=New%20Jersey%20Tax%20Rates%2C%20Collections%2C%20and%20Burdens&text=There%20is%20also%20a%20jurisdiction,How%20Does%20Your%20State%20Compare?) from 6.5% to 11.5%), one of the highest individual income tax rates and some of the highest property taxes in the country. On top of that, the Garden State taxes international income aggressively, imposes an inheritance tax and has a complicated system for calculating individual income taxes. Here's a snapshot of the lowest-ranked states in this year's index: ## 41\. Hawaii - Individual income tax rank: 45th - Sales tax rank: 29th - Property tax rank: 15th ## 42\. Vermont - Individual income tax rank: 39th - Sales tax rank: 30th - Property tax rank: 50th ## 43\. Massachusetts - Individual income tax rank: 42nd - Sales tax rank: 22nd - Property tax rank: 48th ## 44\. Minnesota - Individual income tax rank: 44th - Sales tax rank: 35th - Property tax rank: 23rd ## 45\. Washington - Individual income tax rank: 31st - Sales tax rank: 49th - Property tax rank: 25th ## 46\. Maryland - Individual income tax rank: 47th - Sales tax rank: 40th - Property tax rank: 36th ## 47\. Connecticut - Individual income tax rank: 46th - Sales tax rank: 19th - Property tax rank: 49th ## 48\. California - Individual income tax rank: 49th - Sales tax rank: 46th - Property tax rank: 27th ## 49\. New Jersey - Individual income tax rank: 48th - Sales tax rank: 34th - Property tax rank: 42nd ## 50\. New York - Individual income tax rank: 50th - Sales tax rank: 42nd - Property tax rank: 47th ## If you owe more than $10,000 in taxes, Tax Relief can allow you to break down your debt into payments ### Anthem Tax Relief provides a full menu of tax relief services to help clients get out from under the yoke of tax debt. [Get Started](https://money.com/pr/h7d8f6f742c9?ap_referrer=%2F10-best-states-for-taxpayers%2F) ![](https://s3.consumersadvocate.org/prd/image/image/14979/medium_d9420f2c-6d0b-4726-b903-60fb37740830.png) Owe over $10,000 in taxes? Get Tax Relief with Anthem now! [Get Started](https://money.com/pr/l978cd9f37e2?ap_referrer=%2F10-best-states-for-taxpayers%2F) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/10-best-states-for-taxpayers/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Taxes", "item": "https://money.com/taxes/" }, { "@type": "ListItem", "position": 3, "name": "News", "item": "https://money.com/tag/news/" }, { "@type": "ListItem", "position": 4, "name": "These Are the 10 Most Tax-Friendly States in the U.S." } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/10-best-states-for-taxpayers/#webpage", "url": "https://money.com/10-best-states-for-taxpayers/", "name": "These Are the 10 Most Tax-Friendly States in the U.S.", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2025-11-11T20:35:46.000Z", "mainEntity": { "@id": "https://money.com/10-best-states-for-taxpayers/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/10-best-states-for-taxpayers/#breadcrumb" }, "dateModified": "2026-02-25T19:30:30.000Z" }, { "@type": "NewsArticle", "headline": "These Are the 10 Most Tax-Friendly States in the U.S.", "articleSection": "Taxes", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2024/11/News-Friendliest-State-Taxpayers.jpg", "width": 2880, "height": 1920, "caption": "News-Friendliest-State-Taxpayers" } ], "author": [ { "@type": "Person", "name": "Liliana Hall", "url": "https://money.com/author/liliana-hall/", "@id": "https://money.com/author/liliana-hall/#author", "description": "Liliana Hall joined Money in 2025. 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